Government Grants Customs Duty Exemption on Cotton Imports Until October 2026

The Ministry of Finance, Department of Revenue, has issued a notification dated 30 May, 2026, granting a complete exemption from the Basic Customs Duty (BCD) and the Agriculture Infrastructure and Development Cess (AIDC) on the import of cotton falling under the Heading 5201 of the Customs Tariff Act, 1975.

The exemption has also been introduced in the public interest under Section 25(1) of the Customs Act, 1962, and Section 124 of the Finance Act, 2021. The measure is also aimed at facilitating the availability of cotton for domestic industries, particularly in the textile and apparel sector, and also helping to stabilize input costs.

The notification will also come into effect from 1 June 2026 and will remain valid up to and including 31 October 2026. During this period, eligible cotton imports will be exempt from the entire customs duty as well as the Agriculture Infrastructure and Development Cess otherwise applicable on such imports.

Businesses that are also engaged in cotton import and textile manufacturing should review their procurement and supply chain strategies to take advantage of this temporary duty relief.