Raw Cotton Imports Attract BCD and AIDC for Notified Period

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