Govt exempts all customs duties on cotton imports till 30 Sept

Import of cotton has been fully exempted from customs duties till September 30, 2022, a move which will benefit the textile industry and lower prices for consumers, the Ministry of Finance on Wednesday said in a notification.

"This notification shall come into effect on the 14th April, 2022, and will remain in force up to and inclusive of the 30th September, 2022," the government said in the notification.

This exemption would benefit the textile chain- yarn, fabric, garments and made ups and provide relief to consumers, the ministry noted.

Previously, the import of cotton attracted a 5 per cent basic customs duty and another 5 per cent agriculture infrastructure development cess (AIDC).

The industry has been demanding waiver of duty to lower domestic prices.

The Central Board of Indirect Taxes and Customs (CBIC) notified the exemption from customs duty and agriculture infrastructure development cess for import of cotton.

Since last year, the cotton industry was urging the government to withdraw both the basic customs duty and the AIDC levied on cotton to create a level playing field on the raw material front for the Indian textile and clothing Industry. 

India generally imports only extra-long staples, organic and sustainable cotton, but the removal of import duty will also lead to more import of medium and short-staple cotton.