Vardhman Textiles, other textile stocks rally up to 9% after Govt removes cotton import duty

Textile stocks rallied sharply on Tuesday, climbing as much as 8%, after the government announced the removal of import duty on cotton from August 19 to September 30, a move aimed at easing cost pressures on the garment industry.

Vardhman Textiles shares witnessed the highest surge, shooting up by 9.3% to Rs 447.50

This was followed by the shares of Ambika Cotton Mills, which rose 7.6% to Rs 1,536.65 and Welspun Living that jumped 6.5% to an intraday high of Rs 124.75 on the BSE.


Further, Gokaldas Exports shares shot up by 3.5% to their day’s high of Rs 751.45

The exemption fulfils a long-standing demand from industry bodies such as the Confederation of Indian Textile Industry (CITI), which had urged the government to scrap the cotton import duty to support manufacturers facing rising costs. Previously, cotton imports attracted an 11% duty, which had weighed heavily on the sector’s margins.

Industry officials noted that the government’s decision will provide immediate relief to textile and garment exporters, especially at a time when the industry is grappling with a 50% tariff on shipments to the United States.

The temporary suspension is seen as a key measure to help India remain competitive against peers like Bangladesh and Vietnam, who benefit from lower import costs.

Analysts said that market participants are now betting on the possibility of the duty-free regime being extended beyond September, given the sector’s ongoing challenges, such as labour shortages, production bottlenecks, and the need to counter global competition.

India had imposed the cotton duty in February 2022, which significantly reduced the US share in India’s cotton imports, from 40–50% earlier to just about 19% in FY25. As a result, the industry had increasingly relied on Brazilian cotton, but costs remained elevated compared to competitors.

The Ministry of Textiles has set an ambitious target of expanding the sector to $350 billion by 2030, including $100 billion in exports, from the current market size of $180 billion.

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