The Northern India Textile Mills Association (NITMA) on Wednesday lauded the Central government's decisive decision to exempt import duties on all varieties of cotton (HSN 5201) till September 30.

The exemption covers five per cent customs duty, five per cent Agriculture Infrastructure and Development Cess (AIDC), and one per cent additional cess, offering much-needed relief to the textile industry.

NITMA Senior Vice-President Munish Avasthi thanked Prime Minister Narendra Modi for visionary leadership and Union Finance Minister Nirmala Sitharaman and Textiles Minister Giriraj Singh for swiftly addressing the textile industry's pressing concerns.

He emphasised that this measure is a critical enabler in achieving India's $100 billion textile export target, especially as the sector grapples with high raw material costs and a widening gap between domestic and global cotton prices.

"The removal of import duty on cotton is a strategic intervention that will stabilise the supply chain and support the entire cotton value chain during a period of acute raw material stress," said Avasthi in a statement.

However, he also flagged a concern regarding the limited duration of the exemption, noting that cotton shipments from key sourcing countries, such as the US and Brazil, generally require 70 -75 days, potentially limiting the benefit for importers.

On the man-made fibre (MMF) front, Sidharth Khanna, President of NITMA, highlighted the long-standing issue of Inverted Duty Structure (IDS) under GST, which continues to hinder growth and investment across the MMF textile value chain.

While commending the government's proactive stance on cotton, he urged the Ministries of Finance and Textiles to extend similar support to MMF by adopting a uniform five per cent GST rate across the MMF value chain, in line with the cotton value chain by reducing GST on MMF yarn from 12 to five per cent and on inputs like PTA, MEG, and man-made fibres from 18 to five per cent.