The Central Government has issued a customs notification providing temporary relief on cotton imports, aimed at supporting domestic industry and stabilizing raw material prices.
Key Highlights of the Notification
Legal Backing
The exemption is notified under:
- Section 25(1) of the Customs Act, 1962.
- Section 124 of the Finance Act, 2021 (related to Agriculture Infrastructure and Development Cess).
Scope of Exemption
Goods Covered: Cotton (falling under heading 5201 of the Customs Tariff Act, 1975).
Relief Granted:
- Complete exemption from Basic Customs Duty (BCD).
- Complete exemption from Agriculture Infrastructure and Development Cess (AIDC).
Effective Period
- Start Date: 19th August 2025
- End Date: 30th September 2025
- The exemption remains valid only during this window.
Impact of the Notification
- Textile Industry Support: Reduction in input cost for yarn and fabric manufacturers.
- Price Stabilization: Helps balance cotton prices in the domestic market during peak demand season.
- Trade Facilitation: Encourages timely imports to meet industry requirements without additional duty burden.
Conclusion
This short-term exemption is a strategic measure to ease supply-side pressures in the textile value chain. Importers dealing in cotton should take note of the validity period to avail of the benefit before 30th September 2025.
Notification Reference: Customs
Notification No. 35/2025-Customs
18 /08/2025