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Textile companies to benefit from waiver on custom duty on cotton imports

ICICIdirect Research 05 Jun 2026 DISCLAIMER

The government has temporarily waived all custom duties on cotton imports from June 1st 2026 to October 31st 2026. Currently the duty stands at 11%. The move is expected to come to ensure better availability of cotton for textile sector and also to reduce cost for textile and yarn companies to provide relief amidst the geopolitical conditions.
View: Government move will provide textile companies (including yarn, apparel and home textile companies) some breather in the uncertain global environment.
Benefit for yarn players: Domestic yarn manufacturers yarn spread (trending close to $1.5 per kg) have improved substantially due to higher international demand (especially from country such as China), which led to Yarn realisation improving by 22% as against 19% increase in the cotton prices. Custom duty waiver will lead to increase in supply of cotton at lower prices. This will further add on to the margins of Yarn manufacturers in the near term.
Benefits for other textile companies: It is also beneficial for apparel and home textile companies, which through vertical integration take care of captive consumption. So overall, the government step of temporary duty waiver is positive for all the domestic textile companies
Key beneficiaries from our coverage universe are Sportking India (Buy; PT – Rs200), Indo Count Industries (Buy; PT – Rs418), Gokaldas Exports (Buy, Rs890), KPR Mill (Buy, Rs1,200) and Pearl Global Industries (Buy, PT – Rs2,255)

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