NEW DELHI – The Indian government has given its struggling textile industry a much-needed boost by extending the exemption on import tariff on cotton till the end of the year. The Press Information Bureau (PIB) announced the decision on Thursday. It extends the original exemption, which was supposed to terminate on September 30.
The interim exception, which started on August 19, was put in place to “increase the availability of cotton for the Indian textile sector” and help exporters. The current trade problems with the United States have affected the textile business quite hard.
The U.S. government, lead by Donald Trump, put an extra 25% tax on a lot of Indian goods that came into the country on Wednesday, August 27. This new levy is in addition to the 25% tariff that is already in place, making the total 50%. The U.S. raised the tax because India was still buying oil from Russia.
India’s textile and clothing industry is a big part of the worldwide market, and it sends a lot of goods to the U.S. India’s textile and clothing exports to the U.S. were worth more than $2 billion in 2024, and they were worth another $1 billion in the first half of 2025. The increased tariffs could make Indian goods less competitive, which could cause a big reduction in orders and job losses.
Shahi Exports, Welspun, Indo Count Industries, Trident, and Gokaldas Exports are some of the biggest Indian clothing and textile exporters. They have big clientele in the U.S. like Walmart, Target, and Gap. The government has decided to extend the cotton import tariff exemption as a way to lower the cost of raw materials and help these businesses stay competitive in a tough international trade market.
The textile and clothing sector has been very clear about how much they need the government to step in. Reports say that exporters in important places like Tirupur, Noida, and Surat have stopped making goods because of the higher tariffs. People regard the government’s decision as one of the first steps in a series of planned actions to lessen the impact of the trade shock.