en.Wedoany.com Reported - The Indian government announced on Saturday the removal of the cotton import tariff for five months, aiming to increase the supply of contaminant-free natural fibers to meet strong overseas demand for cotton yarn, thereby alleviating raw material pressure on textile exporters.

India's current 11% import tariff on cotton will be suspended until October 30. As the world's second-largest cotton producer, India's relaxation of import restrictions may support international cotton prices, but is unlikely to trigger a surge in purchases, as the depreciation of the rupee makes imported cotton slightly more expensive than domestic supplies. Like other industries, India's textile sector faces rising input costs due to supply chain disruptions caused by the Iran war. The government stated that this move is expected to support domestic producers, especially small and medium-sized enterprises, by improving cotton supply.

Vinay Kotak, Chairman of the Cotton Association of India, told Reuters that imports are not economically attractive at current price levels. He noted that export-oriented mills require contaminant-free cotton, and to meet this demand, about 600,000 bales may be imported during the duty-free import window. Industry officials said that Indian cotton is currently the cheapest globally, with ample supplies from this year's harvest in the domestic market, which may limit imports. Cotton is expected to come from surplus regions such as Australia, Brazil, the United States, and Africa.

Last year, India allowed duty-free cotton imports from mid-August to the end of December, driving record imports of 4.7 million bales in the current trade year (starting October 1). A trader at a global trading company in New Delhi said that Indian cotton is mainly grown in dryland areas, and disruptions to monsoon rains due to the El Niño climate pattern could reduce yields of new crops planted in June and increase import demand. The trader added that in such a scenario, the government might extend the duty-free import window beyond October, as it did last year.

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