Textile industry seeks removal of levy amid supply-demand gap concerns

The government is in an “advanced stage of consultation” regarding the 11% customs duty on imports of raw cotton, with a decision expected soon, according to a senior official. Discussions are underway among the finance, textiles and agriculture ministries as industry representatives continue to press for removal of the duty.

New Delhi: The government is examining whether the 11% customs duty on imports of raw cotton can be removed, with consultations currently in progress at an advanced stage, a senior official said.

The deliberations involve ministries including finance, textiles and agriculture. The textile industry has sought withdrawal of the duty, citing increased cost pressures on domestic companies due to high cotton prices.

“We are talking to finance and agriculture (ministries), both, and it is in an advanced stage of consultation. We hope that the consultation will be finalised in the near future,” the official added.

Recently, a delegation comprising apparel industry representatives and exporters met vice president CP Radhakrishnan and several ministers to request removal of the duty.

The delegation stated that the textile industry’s cotton requirement for the current year is projected at around 337 lakh bales, while cotton arrivals for the 2025-26 season are estimated at 292.15 lakh bales. According to the industry representatives, this could result in a supply-demand gap of nearly 45 lakh bales.