To cushion export-oriented garment makers from raw material volatility, the Ministry of Finance extended the customs duty exemption on raw cotton imports through December 31, 2026. The decision to defer the 11 per cent import duty offers critical input-cost stability to textile mills struggling against global inflation and uneven domestic crop arrivals. By maintaining duty-free access for extra-long staple (ELS) varieties, domestic apparel exporters gain essential leverage to compete with low-cost regional manufacturing hubs like Vietnam and Bangladesh.
Sourcing continuity mitigates global supply chain pressures
Sustained raw material cost control remains central to supporting spinning operations and garment production schedules. Industry estimates indicate, raw cotton accounts for nearly 60 per cent of total manufacturing overheads for primary spinning units. Maintaining open import channels balances immediate production needs with farmer protection, ensuring high-value garment manufacturers fulfill international holiday orders on time, notes Rakesh Mehra, Chairman, Confederation of Indian Textile Industry (CITI). This fiscal breathing room enables mills to optimize blending ratios and control margin erosion across downstream operations.
Strategic planning elevates value-added export performance
A brief operational analysis of Indian yarn and apparel exporters shows, duty-free fiber imports lower unit production costs by approximately 4 per cent–6 per cent. This allows garment exporters to lock in competitive pricing for forward delivery contracts, helping reverse recent headwinds in ready-made garment exports across major North American and European markets.
Formulating policy frameworks
The Confederation of Indian Textile Industry (CITI) is India’s premier industrial trade association representing the entire textile value chain from ginning to retail. Founded in 1958, CITI engages with government bodies to formulate policy frameworks, supporting a manufacturing sector that contributes roughly 2 per cent to national GDP and generates substantial industrial employment.
