Textile Shares Rally After Government Waives Cotton Import Duty Till September

Indian textile stocks climbed sharply on Tuesday after the government announced a temporary removal of duties on cotton imports. The measure is designed to reduce input costs for manufacturers and exporters at a time when the sector is under significant global pressure.

The Ministry of Finance issued a notification on August 19, confirming that the 11% basic customs duty and the Agriculture Infrastructure and Development Cess (AIDC) on cotton will not apply from August 19 to September 30, 2025. By easing the duty burden, the government aims to align domestic cotton prices with international levels and give relief to an industry struggling with high costs.

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Market Response

The announcement triggered an immediate surge in textile counters. Vardhman Textiles share price jumped more than 7% to ₹440.15, recording one of its strongest intraday moves in recent months. Raymond Lifestyle stock price rose over 6.5%, while other stocks such as Gokaldas Exports, Indo Count Industries, Alok Industries, Kitex Garments, and Arvind Ltd registered healthy gains between 2% and 5%.

Analysts noted that investors responded positively as the duty waiver is expected to improve profit margins. With raw material costs reduced, companies may be better positioned to take new orders and stabilise operations despite external headwinds.

Relief for Industry

Textile manufacturers have long urged the government to suspend cotton import duties, arguing that higher domestic prices were making it difficult to compete with rivals in Bangladesh and Vietnam, where cotton is available at lower rates. The exemption offers temporary respite and allows local players to access cotton at more competitive prices.

The timing of the move is also significant. Indian exporters are already dealing with a 50% tariff in the United States, one of their largest markets. The waiver provides some cost relief, which could help sustain production and exports during a difficult phase for global trade.

Conclusion

The government’s decision to remove cotton import duties until the end of September has boosted sentiment in the textile sector and the stock market alike. While the exemption is short-lived, it offers vital support to an industry facing both rising costs at home and steep trade barriers abroad.