Arvind, KPR Mill, Welspun Living shares rally as cotton import duty scrapped till Oct 30

In a notification, the finance ministry said the import duty exemption will be effective from June 1, 2026.

Cotton imports, which earlier attracted an effective 11% duty, will now enter India duty-free until October 30, 2026.

The duty exemption will help increase the availability of cotton for the Indian textile sector.

How stocks are faring

Last seen, shares of Arvind Ltd were trading 5.7% higher at ₹500.35 apiece on the NSE, while Gokaldas Exports was trading over 4% higher at ₹720.35. Welspun Living was up 4% at ₹143.49, and Nitin Spinners was trading at ₹512.30, up 4.69%.

Vardhman Textiles was trading 5.50% at ₹608.90, while Trident Ltd was up 4% at ₹25. KPR Mill traded at ₹988, up 2.22% on the NSE.

The temporary duty exemption is expected to reduce input costs across the textile and apparel sector, thereby providing a targeted relief to manufacturers and consumers, while also keeping the interests of domestic farmers in mind.

Overall, the measure is anticipated to have a positive impact on the performance of the domestic textile industry, especially the small and medium enterprises, ensuring better availability of cotton in the market, the ministry said.

What the Textile Ministry said

The Centre's move to exempt all customs duties on cotton imports for five months till October 30 will ensure adequate availability of cotton for the textile industry, lower input costs and boost the competitiveness of Indian textiles, the Textile Ministry said on Saturday.

What the textile industry said

Industry bodies welcomed the decision, terming it a "much-needed relief" for the apparel sector.

"The measure is expected to augment the availability of cotton for the Indian textile and apparel sector and provide much-needed relief to the entire value chain," the Apparel Export Promotion Council (AEPC) stated.

AEPC Chairman A Sakthivel stated that the decision will particularly benefit small and medium enterprises, which have been facing challenges due to the sharp increase in cotton and yarn prices.

Sakthivel further noted that the removal of customs duty on cotton imports is the need of the hour and will help moderate domestic cotton prices.

In this regard, Sakthivel appealed to all spinning mills to pass on the benefits of lower cotton costs by rationalising yarn prices. This will help stabilise the entire textile value chain and enable garment exporters to secure and execute export orders more competitively in the coming months, Sakthivel said.

"Amid the ongoing global volatility and uncertainty, the 11 per cent import duty on cotton was acting as a major hindrance to the Indian textile and apparel sector in raising its global competitiveness since our major Asian competitors already have duty-free access to cotton," Confederation of Indian Textile Industry (CITI) Chairman Ashwin Chandran said.

The cotton import duty was driving up costs across the value chain and having a detrimental impact on efforts to scale India's textile and apparel exports, Chandran added.

India's textile exports are dominated by cotton. India is aiming for $100 billion in textiles and apparel exports by 2030.

Stocks in focus

The customs duty exemption on cotton imports is positive for textile and apparel manufacturers that rely on imported cotton, as it lowers raw material costs and improves margins, especially at a time when domestic cotton prices remain elevated.

Stocks that are likely to benefit from the Centre's move include Vardhman Textiles, Trident, Welspun Living, KPR Mill, Arvind, Page Industries, Gokaldas Exports, and Pearl Global Industries, KPR Mill, and Nitin Spinners.

In simple terms, the duty waiver should help textile and garment makers reduce input costs, improve profitability, and enhance export competitiveness, while domestic cotton producers and ginners may face pressure from cheaper imported cotton.

Besides, the duty exemption, analysts note, helps narrow India's cost gap with export-focused rivals such as Vietnam and Bangladesh.