Centre Extends Cotton Import Duty Exemption Till December 31: SIMA Welcomes Move, Seeks Relief Until 2030

Coimbatore: The Southern India Mills' Association (SIMA) has welcomed the Union Government's decision to extend the exemption of 11% import duty on cotton until December 31, 2026, stating that the move would provide relief to the domestic textile industry amid supply constraints and rising production costs.

In a notification issued on Friday, October 30, 2026, the Union Finance Ministry announced the extension of the exemption, which was earlier in force until October 31, by two more months.

Reacting to the announcement, SIMA Chairman Durai Palanisamy thanked Prime Minister Narendra Modi and the Union Ministers of Textiles, Commerce and Industry, Agriculture and Finance for considering the representations made by the cotton textile value chain.

He highlighted that India produced 398 lakh bales of cotton and achieved an average productivity of 565 kg per hectare during the 2025–26 cotton season. However, productivity is estimated to decline to around 280 kg per hectare in the current 2026–27 season, against an industry requirement of approximately 360 lakh bales. He added that domestic production of organic and BCI cotton stood at around 12–15 lakh bales, with most of it exported to countries such as Bangladesh.

The association estimates that India could face a cotton shortage of around 100 lakh bales. Achieving self-sufficiency in medium and long-staple cotton could take seven to ten years, while the country would continue to depend on imports for ELS cotton and other customer-specific varieties.

Durai Palanisamy also highlighted the challenges faced by private seed producers in introducing advanced biotechnology-based seed varieties due to licensing issues and inadequate availability of new technology seeds. He said these constraints could affect efforts to improve domestic cotton productivity, which currently stands at 430–440 kg per hectare, compared with the global average of 815 kg and over 1,500 kg in leading cotton-producing countries.

Against this backdrop, the SIMA Chairman appealed to the Prime Minister to extend the cotton import duty exemption for all varieties until March 2030, with periodic reviews based on market conditions and price movements. He also urged the government to regularly assess domestic cotton supply and demand and introduce appropriate measures to safeguard the interests of all stakeholders.

He maintained that continued policy support was essential to ensure adequate cotton availability and sustain the competitiveness of the Indian textile industry.