Business
Imported Cotton Freed From BCD and AIDC Until October 31
The Central Government has exempted imported cotton from Basic Customs Duty and Agriculture Infrastructure and Development Cess for five months, aiming to improve domestic availability and support the textile industry.
The Government of India has announced a temporary exemption on import duties for cotton, providing significant relief to the textile and garment sectors.
According to a notification issued by the Ministry of Finance on May 30, 2026, imported cotton classified under Customs Tariff Heading (CTH) 5201 has been exempted from the entire Basic Customs Duty (BCD) as well as the Agriculture Infrastructure and Development Cess (AIDC).
The exemption has been granted in public interest under the provisions of the Customs Act, 1962, and the Finance Act, 2021.
Duration of the Exemption
| Particulars | Details |
|---|---|
| Product | Imported Cotton (CTH 5201) |
| Duty Exempted | Basic Customs Duty (BCD) |
| Additional Relief | Agriculture Infrastructure and Development Cess (AIDC) |
| Effective Date | June 1, 2026 |
| Valid Till | October 31, 2026 |
Objective of the Move
The decision is expected to:
- Improve the availability of cotton for domestic textile manufacturers.
- Reduce raw material costs for spinning and textile mills.
- Support exports of textiles and garments.
- Help stabilize cotton prices in the domestic market.
- Ensure adequate supply during the peak production season.
India is one of the world’s largest producers and consumers of cotton, and the textile sector is a major contributor to employment, exports, and industrial output. Industry stakeholders have often sought duty relief during periods of supply constraints or rising input costs.
The temporary waiver is expected to benefit textile mills, yarn manufacturers, garment exporters, and other downstream industries dependent on cotton as a key raw material.
Officials said the exemption will remain in force until October 31, 2026, after which the government may review the policy based on market conditions and domestic cotton availability.
