India has suspended an 11 per cent import duty on cotton until September 30, in a move seen as a signal to Washington that New Delhi is willing to address US concerns on agricultural tariffs, while also easing pressure on its garment industry.
The temporary suspension, announced late on Monday, could benefit US cotton growers and provide relief to India’s apparel sector, which faces tariffs of nearly 60pc on shipments to the US from later this month.
A planned visit by US trade negotiators to New Delhi from August 25-29 has been called off, delaying talks on a proposed bilateral trade agreement and dashing hopes of relief from an additional 25pc US tariff on Indian goods from August 27.
President Donald Trump earlier this month announced an extra tariff on Indian goods as punishment for New Delhi’s purchases of Russian oil, doubling the total duty to 50pc on US imports of Indian goods from later this month.
Indian exports had previously faced levies of 0-5pc, with duties on some textiles ranging between 9pc and 13pc before Trump raised tariffs in April.
The US is the biggest market for India’s garment exporters, who say steep tariffs are leading to order cancellations and making them uncompetitive against Bangladesh and Vietnam, which have US duties of 20pc, and China at 30pc.
India’s labour-intensive sectors, including textiles, footwear, engineering goods and shrimp, have been jolted by US tariffs, and are now seeking alternative markets.
“The largest beneficiary of the duty free import will be the US, the second largest supplier to India,” said Ajay Srivastava, founder of Global Trade Research Initiative, a New Delhi-based think tank, adding India already allows duty-free cotton imports from Australia within a quota.
Cotton imports more than doubled to $1.2 billion in the 2024/25 fiscal year to March, from $579 million a year earlier, led by $258m from Australia, $234m from the US, $181m from Brazil and $116m from Egypt, Srivastava said.
&uuid=(email))