By Shailesh Yadav
New Delhi [India], 19 August (ANI): In a major relief to the textile and garment industry, the Central Government on Monday announced a complete waiver of customs duty and Agriculture Infrastructure and Development Cess (AIDC) on the import of raw cotton.
According to a notification issued by the Ministry of Finance, the exemption will be applicable on cotton falling under heading 5201 of the Customs Tariff Act, 1975. The waiver will come into effect from August 19, 2025, and remain valid till September 30, 2025.
The Finance Ministry said the decision was taken in public interest to ease raw material costs for domestic manufacturers and exporters at a time when the textile sector has been facing price volatility and supply pressures.
Industry experts believe the move will help stabilize yarn prices, improve competitiveness of Indian garments in global markets, and support small and medium enterprises in the textile value chain.
The temporary duty relief is expected to bring down input costs for fabric and garment manufacturers, especially ahead of the festive season when demand for cotton-based products surges.
The notification makes it clear that the exemption will cease after September 30 unless extended further by the government.
Meanwhile, India’s GDP growth projection is at 6.7 per cent in the first quarter of the current financial year which is higher than the RBI estimates of 6.5 per cent, according to rating agency ICRA.
The agency noted that however GDP expansion has eased from 7.4 per cent in Q4 FY2025, while it outpaces the Monetary Policy Committee’s (MPC’s) recent forecast of 6.5 per cent.
The rating agency also said the growth in gross value added (GVA) is expected to ease to 6.4 per cent in Q1 FY2026 from 6.8 per cent in Q4 FY2025.
The slowdown in the industrial sector and agriculture is likely to offset the strong performance of the services sector.
Industrial growth is estimated to fall to 4.0 per cent in Q1 FY2026 from 6.5 per cent in the previous quarter, while agriculture growth is projected at 4.5 per cent compared with 5.4 per cent earlier. On the other hand, services are set to rise to an eight-quarter high of 8.3 per cent, up from 7.3 per cent.
ICRA also expects a double-digit rise in net indirect taxes in nominal terms, though lower than the 22.7 per cent recorded in Q4 FY2025. This improvement comes from a sharp increase in the Government of India’s indirect taxes, which grew by 11.3 per cent in Q1 FY2026 against a contraction of 3.1 per cent in Q4 FY2025.
At the same time, the subsidy outgo contracted at a narrower pace of 7.3 per cent, compared with 40.7 per cent in the previous quarter. Because of this, the gap between GDP and GVA growth is expected to stay positive at about 30 basis points in Q1 FY2026, though lower than the 62 basis points in Q4 FY2025.
Government spending has played a key role in boosting growth. Based on CGA data, the Centre’s gross capital expenditure surged 52.0 per cent year-on-year to Rs. 2.8 trillion in Q1 FY2026, compared with 33.4 per cent growth in Q4 FY2025 and a 35.0 per cent contraction in Q1 FY2025. (ANI)
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