New Delhi: The day after 50% of US tariffs came into force, the Indian government expanded its exception to imports of raw cotton and by December 31, 2025 to 31 December 2025.
According to the Ministry of Finance, a relief has now been extended, which was originally announced between 19 August and September 30, now extended to cover the last three months of the year. Before the exception, the import of cotton to India attracted a combined obligation around 11%.
The decision, although focused on the occurrence of supplies for the domestic textile industry before the festival season, is also considered a calibrated gesture against Washington at the time of tense business relations.
This comes in decisive time in business relations in India-USA, while Washington recently deposited steep mutual tariffs on Indian exports and stopping in business interviews. According to a joint statement issued by the management of both countries on 13 February, the first tranches of the bilateral trade agreement (BTA) must be completed in the autumn of 2025.
“It is a calibrated gesture that concerns us and at the same time protects domestic sensitivity,” said Ajay Srivastava, founder of the global business research initiative (Gtri). The extension window will allow the new Delhi to maintain the lever effect of bargaining in bilateral interviews that stopped after the US canceled its last negotiating round, said.
Indian cotton production dropped from about 33.7 million packages in FY23 to an estimated 30.7 million packages in FY25, which forced the mills to intensify the imports. Industrial associations warned that tight stocks could increase the costs of yarn and clothing, which threatens export competitiveness. With nearly 35 million people addicted to the value chain of cotton and textiles, which represent about 80% of Indian exports of textile exports, the government hopes that the relief of the duty to cool the price of raw materials.
For US exporters, this step offers direct opening. Almost all Indian imports of cotton of $ 1.2 billion in FY25 were clamp lengths of 28 mm fiber or higher, segment where the US is a leading supplier.
“Cotton was a follow -up point in discussions. Goodwill can accommodate this step in the dialog and may prepare a way for wider concessions in textiles,” said Executive Director with leading exporters.
Indian imports of cotton increased to 2.71 million packages in FY25 out of 1.52 million parcels in FY24, while the key suppliers were the US, Brazil, Egypt and African producers such as Benin and Tanzania.
While Washington’s tariff increase casts a shadow above the bilateral prospects for the shop, the transfer of a new dilli to cotton reads as an attempt to soften the edges of the dispute.
According to the evaluation of Crisil evaluation, the growth of Indian revenues of the finished clothing (RMG) is set to the almost year -on -year half of this fiscal fiscal, as the deposit of 50% of the US tariffs on imports from India has been from 27 August. This, along with a decline in profitability, will affect the credit metric of industrial players. The impact will vary by society, with some of the US derive more than 40% of their US income.
(Tagstotranslate) India for cotton imports for cotton imports Liberation 2025
