Notification No. 35/2025-Customs, Dated 18-08-2025
Government Grants Duty Exemption on Cotton Imports
The Government has issued a fresh notification providing full exemption on goods falling under Heading 5201, which primarily covers raw cotton. This exemption relieves importers from paying customs duty on cotton, a key raw material for the textile and garment industry. By removing the customs duty burden, the government aims to stabilize domestic supply and provide cost relief to manufacturers.
Exemption from Agriculture Infrastructure and Development Cess
In addition to customs duty, the notification also exempts cotton imports from the Agriculture Infrastructure and Development (AID) Cess, which is normally levied under the Finance Act, 2021. This dual exemption ensures that importers face no additional levy on cotton imports during the specified period, thereby reducing the overall landed cost of cotton in India.
Effective Period of Exemption
The notification clearly specifies that this exemption will apply from 19th August 2025 and shall remain valid till 30th September 2025 (both dates inclusive). This limited time frame indicates that the government intends to provide temporary relief to the textile industry, possibly in response to short-term supply constraints, seasonal demand fluctuations, or rising domestic cotton prices.
Implications for the Textile Sector
This duty exemption is expected to significantly benefit textile and apparel manufacturers, who rely heavily on cotton as a raw material. By lowering import costs, the measure could help reduce production expenses, stabilize fabric prices, and improve competitiveness in domestic and export markets. However, as the exemption is temporary, industry stakeholders will need to closely monitor government policy decisions beyond September 2025 to plan their raw material procurement strategies effectively.
