The Central Government, Ministry of Finance, Department of Revenue, has issued Notification No. 19/2026-Customs [G.S.R. 420(E)], dated May 30, 2026, granting temporary exemption from customs duty and Agriculture Infrastructure and Development Cess (AIDC) on the import of Cotton (Customs Tariff Heading 5201) into India. The exemption shall be in force from 1 June 2026 and shall remain in force up to and inclusive of 31 October 2026.
The notification has been issued in exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962, read with section 124 of the Finance Act, 2021, the Central Government being satisfied that it is necessary in the public interest to grant this exemption.
Scope of Exemption: The notification exempts Cotton falling under Heading 5201 of the First Schedule to the Customs Tariff Act, 1975 from: (i) the whole of the duty of customs leviable under the First Schedule to the Customs Tariff Act, 1975; and (ii) the whole of the Agriculture Infrastructure and Development Cess (AIDC) leviable under section 124 of the Finance Act, 2021. The exemption thus brings the effective customs duty rate on cotton imports to nil for the specified period.
Duration: The exemption is temporary in nature and is operative from 1 June 2026 to 31 October 2026 (both dates inclusive), covering the period coinciding with peak consumption and processing activity in the domestic textile and spinning industry.
Background — Cotton Imports and Textile Sector: Cotton (HS Heading 5201) is the primary raw material for India’s spinning, weaving, and textile manufacturing sector, which is a significant contributor to employment and exports. The grant of a temporary duty exemption is aimed at ensuring adequate availability of raw cotton to domestic textile mills and yarn manufacturers at competitive prices, providing relief to the industry during a period when domestic cotton availability and prices may be under pressure.
The normal applicable rate of Basic Customs Duty on cotton under Heading 5201 is 11 per cent (inclusive of Social Welfare Surcharge), in addition to the Agriculture Infrastructure and Development Cess. By exempting both the Basic Customs Duty and the AIDC in their entirety for this five-month window, the Government has significantly reduced the cost of raw material procurement for domestic textile manufacturers sourcing cotton from abroad.
This measure is consistent with the Government’s stated policy of supporting the textile value chain and ensuring the competitiveness of Indian textile exports. Cotton importers and textile manufacturers are advised to take note of the precise dates of the exemption window and ensure compliance with all applicable customs documentation and procedural requirements at the time of import.
The Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/05/Temporary-exemption-of-custom-duty-on-cotton-imports.pdf
