Government of India Temporarily Exempts Customs Duty and Agriculture Cess on Imported Cotton (June

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Dated: 01.06.2026

Government of India Temporarily Exempts Customs Duty and Agriculture Cess on Imported Cotton (June–October 2026)

The Ministry of Finance, Government of India, has issued a significant notification (No. 19/2026-Customs) that directly impacts the cotton industry and related sectors. This article provides a comprehensive overview of the notification, its implications, and what stakeholders need to know.

Overview of the Notification

On May 30, 2026, the Department of Revenue under the Ministry of Finance announced an exemption for imported cotton from both customs duty and the Agriculture Infrastructure and Development Cess. This exemption is enacted under the powers granted by the Customs Act, 1962, and the Finance Act, 2021.

Key Provisions

Goods Covered:
- The exemption applies specifically to cotton classified under heading 5201 of the First Schedule to the Customs Tariff Act, 1975.
- Only raw cotton imports are covered under this notification.
Nature of Exemption:
- Full exemption from customs duty as per the First Schedule to the Customs Tariff Act, 1975.
- Full exemption from the Agriculture Infrastructure and Development Cess as per the Finance Act, 2021.
Validity Period:
- The exemption is effective from June 1, 2026.
- It remains in force up to and including October 31, 2026.

Implications for Stakeholders

For Importers and Textile Industry

Cost Reduction: Importers of cotton will benefit from reduced costs, as both customs duty and agriculture cess are waived during the specified period.
Supply Chain Impact: Textile manufacturers and related industries may experience improved raw material availability and potentially lower input costs.

For Farmers and Domestic Producers

Market Dynamics: The exemption could influence domestic cotton prices due to increased competition from imported cotton. Stakeholders should monitor market trends closely during the exemption period.

For Policymakers and Trade Analysts

Policy Objective: The notification cites public interest as the reason for the exemption, likely aiming to stabilize cotton supply and prices, especially if there are concerns about domestic shortages or price volatility.

Table: Summary of Exempted Goods

Sl. No.	Heading	Description of Goods
1	5201	Cotton

Important Dates

Start Date: June 1, 2026
End Date: October 31, 2026

Conclusion

This temporary exemption on customs duty and agriculture cess for imported cotton is a strategic move by the Government of India to address market needs and support the textile sector. Stakeholders should take note of the effective dates and adjust their import and procurement strategies accordingly.

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Source: CBIC, Ministry of Finance, Govt. of India

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