The Finance Ministry on Monday eliminated the 11% duty on cotton imports with immediate effect, citing the need to safeguard competitiveness amid concerns over job losses triggered by steep US tariffs that risk making Indian products uncompetitive in the country's largest export market.

The notification states that the removal of both the import duty and the Agriculture Infrastructure and Development Cess (AIDC) is 'in the public interest' and will remain in force from August 19 through September 30.

The textile industry is particularly vulnerable to the elevated US tariffs, especially since the US accounts for a significant share of India's ready-made garment exports. While India faces a 50% tariff rate, competing countries such as Bangladesh and Vietnam are subject to tariffs of 20%, and Indonesia and Cambodia at 19%.

Industry experts welcomed the government's timely intervention, citing that the duty suspension will help bring domestic cotton prices closer to international levels, improve India's cost competitiveness against regional rivals, and provide a much-needed boost to export prospects.

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