Shares of textile companies including Vardhman Textiles, Gokaldas Exports, Welspun Living, Ambika Cotton Mills and Indo Count Industries rose as much as 9% on Tuesday, 19th August, after the Centre removed the 11% import duty on raw cotton until 30th September.
The Finance Ministry, through the Central Board of Indirect Taxes and Customs, issued a notification on Monday removing both the basic customs duty and the Agriculture Infrastructure and Development Cess on cotton imports. The move provided temporary relief to the textile and garment industry, which has been under pressure from tariffs announced by the United States.
On 31st July, US President Donald Trump announced that India would face a 25% tariff beginning in August, along with penalties for purchasing oil from Russia. The duty waiver on raw cotton imports was introduced to help offset the impact of a broader 50% tariff on Indian exports set to take effect on 27th August.
The exemption is expected to benefit the entire textile chain, including yarn, fabric, garments and made-ups.
Vardhman Textiles shares witnessed the highest surge, shooting up by 9.3% followed by the shares of Ambika Cotton Mills, which rose 7.6% and Welspun Living that jumped 6.5% on the BSE. Further, Gokaldas Exports shares shot up by 3.5%. Nahar Spinning also saw a 9% rise, while Kitex Garments, Welspun Living, Indo Rama Synthetics (India), Nitin Spinners, Indo Count Industries and Siyaram Silk Mills gained between 3% and 8% in intraday trade on the BSE.
