The Centre on 1 June announced a temporary exemption from all customs duties on cotton imports, effective 1 June to 30 October, providing immediate relief to Tiruppur's knitwear and textile industry. The move, aimed at moderating domestic cotton prices and easing raw material shortages, has been broadly welcomed by exporters, spinning mills, and industry associations across Tamil Nadu.

What the Duty Waiver Covers

The temporary exemption removes all customs duties on cotton imports for a five-month window. Industry leaders say the measure will lower input costs across the entire textile value chain — from spinning mills procuring raw cotton to garment exporters competing in global markets. The relief is particularly significant given that cotton and yarn prices have risen sharply over the past several months.

Industry Reaction

Apparel Export Promotion Council (AEPC) Chairman A. Sakthivel called the move 'the need of the hour.' He said the waiver would 'help moderate domestic cotton prices, improve the availability of quality cotton and reduce input costs across the textile value chain.' Sakthivel further noted that the measure would strengthen the competitiveness of Indian textile and apparel exports at a time when the country faces intense pressure from rival textile-producing nations.

Tiruppur Exporters' Association (TEA) President K.M. Subramanian said the decision would 'help reduce production expenses and improve the operating environment for knitwear exporters,' adding that the industry had long sought measures to ease the burden of rising raw material costs.

South India Hosiery Manufacturers Association (SIHMA) President P. Shanmugasundaram said the exemption would support the full textile ecosystem — spinning mills, fabric manufacturers, and garment exporters alike — and boost major hubs such as Tiruppur, which is central to India's knitwear export footprint.

Impact on SMEs and Export Competitiveness

Small and medium enterprises (SMEs) stand to gain the most from the duty relief, according to AEPC's Sakthivel. Many SMEs have been squeezed by the sharp rise in cotton and yarn prices, with limited ability to pass on costs to overseas buyers. Lower import-parity pricing for cotton is expected to ease that margin pressure and help Indian exporters reclaim ground lost to competitors in Bangladesh, Vietnam, and other low-cost textile hubs.

This comes amid a broader push by the Centre to shore up India's textile export performance, which has faced headwinds from global demand softness and elevated input costs. Tiruppur alone accounts for a substantial share of India's total knitwear exports, making it a bellwether for the sector's health.

What Happens Next

The exemption runs through 30 October, after which the government is expected to review cotton price trends and supply conditions before deciding on any extension. Industry stakeholders have expressed hope that the measure will stabilise cotton prices, strengthen export order books, and inject fresh momentum into one of India's largest employment-generating sectors. Whether the five-month window proves sufficient will depend on how quickly import volumes respond and whether domestic prices correct meaningfully.