India's finance ministry has extended its customs-duty waiver on imported cotton by a further two months, shifting the expiry date from 31 October to 31 December 2026. The change was introduced through Notification No. 35/2026-Customs, published on 30 October, which amends the earlier Notification No. 19/2026-Customs of 30 May. The ministry presented the amendment as being in the public interest and grounded it in the Customs Act, 1962 together with the Finance Act, 2021.
The Southern India Mills' Association (SIMA) responded positively, with chairman Durai Palanisamy saying the extra two months should help mills secure fibre, keep costs in check and honour export commitments. He recalled that some 72 lakh bales entered the country duty-free during the 2025-26 season under the temporary waivers, which the association credits with easing shortages, safeguarding jobs and allowing exporters to fill their orders.
The supply picture explains the decision. SIMA puts India's 2026-27 crop at about 280 lakh bales against roughly 360 lakh bales of expected demand, and forecasts a gap of around 100 lakh bales once exports of 12–15 lakh bales of organic and Better Cotton Initiative cotton are counted.
Cotton's weight in the chain is considerable, according to Palanisamy: roughly 70 per cent of the cost of spinning yarn, half of fabric production costs and 30–35 per cent of what it takes to make a garment. He argued that the sector needs sufficient volumes of the right quality at prices that compete internationally if it is to make the most of recently concluded free trade agreements with the UK, the EU and the US, along with the TEEM scheme and PM MITRA parks. SIMA calculates that 475–500 lakh bales a year would be needed to underpin a government vision in which trade grows from around $172 billion to $350 billion, exports from $36 billion to $100 billion, $100 billion of fresh investment arrives and 20 million jobs are created; the industry already employs more than 45 million people, roughly half of them women.
The association also flagged obstacles on the production side, among them limits on advanced seed technology and defoliants, difficulty in bringing in better-performing varieties, pest pressure, soil conditions and unpredictable weather — issues touching more than six million growers. SIMA puts Indian yields at around 430–440 kg per hectare, against a world average of 815 kg, with more than 20 countries surpassing 1,500 kg per hectare. It expects seven to 10 years before India can meet its own needs in medium- and long-staple cotton, and sees continued import dependence for extra-long-staple and other specific varieties. The association wants the waiver widened to every variety through 2030, with regular reviews of supply, demand and prices.
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