Govt Exempts Customs Duty and AIDC on Cotton Imports for a Limited Period [Read Notification]
The Finance Ministry exempted customs duty and AIDC on cotton imports from 19 August to 30 September 2025
Cotton Imports
Cotton Imports
The Ministry of Finance, Department of Revenue, through Notification No. 35/2025-Customs dated 18 August 2025, has granted a temporary exemption from customs duty and the Agriculture Infrastructure and Development Cess (AIDC) on the import of cotton into India.
This decision comes into effect from 19 August 2025 and will remain valid up to and including 30 September 2025. During this period, importers of cotton falling under tariff heading 5201 of the Customs Tariff Act, 1975, will not be required to pay any customs duty or AIDC on such imports.
The exemption has been granted under the powers conferred by Section 25(1) of the Customs Act, 1962, read with Section 124 of the Finance Act, 2021. The notification has been signed by Dheeraj Sharma, Under Secretary, on behalf of the Ministry of Finance.
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By temporarily waiving duties and cess, the government tries to ease the cost burden on manufacturers, ensure adequate availability of cotton in the domestic market, and possibly stabilize cotton prices. Textile exporters, especially those engaged in garments and home furnishings, are expected to benefit from cheaper raw material imports during this exemption window.
After 30 September 2025, unless extended or replaced by a fresh notification, normal customs duties and cess will again apply on cotton imports.
What is heading 5201?
Tariff heading 5201 refers to “Cotton, not carded or combed.” This is the most basic, raw form of cotton – fibre as it comes from the plant, after ginning (removing seeds) but before it is processed further.
It does not include cotton yarn, fabric, or waste. Raw cotton under 5201 is the foundation of the textile value chain, as it is first spun into yarn, then woven or knitted into fabrics, and finally converted into garments and other products.
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