US poised to achieve most from India’s raw cotton import responsibility waiver: GTRI

The US (USA) will emerge as the most important beneficiary of the entire waiver of customs responsibility and Agriculture Infrastructure and Growth Cess (AIDC) on the import of raw cotton, which was introduced by the Centre this month, in response to the World Commerce Analysis Initiative (GTRI). “Below the India-Australia ECTA, 51,000 MT of such cotton already comes duty-free, however the largest gainer now would be the US, India’s second-largest provider,” the GTRI stated in its newest evaluation notice.

Cotton usually attracts 11 per cent import responsibility (5 per cent BCD + 5 per cent AIDC), in place since February 2021.

In keeping with a authorities notification, an entire waiver of responsibility on the import of cotton is a short-term measure, solely until December 2025, to help India’s textile and attire exporters, enhance world competitiveness, and comes with none draw back for Indian farmers.

“The brief duty-free window will ease uncooked materials shortages for yarn and material exporters forward of the festive season,” the coverage assume tank added in its notice.

On August 19, whereas notifying the transfer, the Ministry of Finance stated that the exemption shall be relevant to cotton falling beneath heading 5201 of the Customs Tariff Act, 1975. The waiver will come into impact from August 19, 2025, and stay legitimate until September 30, 2025. Nonetheless, the identical was prolonged until December 31 on August 28, 2025.

The Finance Ministry had stated the choice was taken within the public curiosity to ease uncooked materials prices for home producers and exporters at a time when the textile sector has been dealing with worth volatility and provide pressures.

The notice highlighted that India’s cotton imports have greater than doubled to USD 1.20 billion in FY2025 from USD 579.2 million in FY2024. Main suppliers final 12 months have been Australia (USD 258.2 million), the U.S. (USD 234.1 million), Brazil ( USD 180.8 million), and Egypt (USD 116.3 million).

Practically 99 per cent of those imports are of longer staple cotton (28 mm and above), which isn’t grown in India in adequate amount. GTRI notice added that this implies the waiver won’t have an effect on native farmers, who primarily produce medium- and short-staple cotton.

The cotton import waiver has attracted criticism from the political events too, as former Delhi Chief Minister and Aam Aadmi Social gathering convenor Arvind Kejriwal on Thursday criticised the Union Authorities, alleging that it has betrayed Indian cotton farmers beneath strain from US President Donald Trump.

Kejriwal talked about that as a result of 11 per cent responsibility on US cotton, the cotton of Indian farmers used to promote simply within the Indian market.