FX.co ★ India Opens Duty-Free Cotton Imports

India has announced the suspension of import duties on cotton starting today, August 19, until September 30. This decision comes in response to industry demands aimed at enhancing the competitiveness of the garment sector. Despite being the world's third-largest exporter of raw cotton, after Brazil and the United States—with an export value reaching USD 6.78 billion in the fiscal year 2024—local textile manufacturers often need to import certain varieties of cotton. The reduction in duties provides much-needed relief against the hefty 50% tariff imposed by the US on Indian apparel. This tariff consists of an existing 25% levy along with an additional 25% penalty related to India's purchases of Russian oil. Previously, cotton imports were subjected to an 11% duty. Industry representatives have indicated that this duty-free period could potentially be extended if the pressures persist. Meanwhile, according to Reuters, some exporters are contemplating relocating portions of their production abroad as a strategy to offset the impact of the increased US tariffs.