Cotton Import Duty Waiver: Textile Stocks Rally

Cotton Import Duty Waiver Triggers Broad Textile Rally The Finance Ministry's June 1 notification wiping out the 11% customs duty on cotton imports, effective through October 31, 2026, is the most direct margin catalyst the textile sector has seen in several years. [Arvind Limited](/stock/ARVIND) hit a 52-week high on the news. [Vardhman Textiles](/stock/VARDHTEX), [Nitin Spinners](/stock/NITINSPIN), and [Gokaldas Exports](/stock/GOKALDAS) each moved 4–5% within the session. This isn't a knee-jerk trade. A five-month duty window is long enough to show up in two consecutive quarterly earnings — Q1 FY27 (April–June) and Q2 FY27 (July–September) — which is exactly why institutional desks are taking this seriously. India's textile industry imports roughly 15–20 lakh bales annually when domestic cotton prices are elevated or supply is tight. The 11% levy on those imports directly inflated the cost of raw cotton for spinning mills. Removing it doesn't just trim input costs. It gives mills pricing flexibility they haven't had in a while. Spinners running on tight EBITDA margins of 8–12% stand to gain the most, since cotton typically accounts for 60–70% of their total input cost. Even a 3–4 percentage point improvement in raw material cost as a proportion of revenue translates into meaningful margin expansion at the operating level. Which Stocks Are Most Exposed to the Upside NSE: NITINSPIN is arguably the cleanest play here. Nitin Spinners is a pure-play cotton yarn manufacturer with limited diversification, so any movement in cotton input costs flows almost directly to the bottom line. The stock's FairStock Score puts it in the watchlist range for value-oriented institutional investors. At current levels, the duty waiver could add 150–200 basis points to EBITDA margins if management uses the window to lock in lower-cost imported cotton for the next two quarters. NSE: VARDHTEX is a different animal. Vardhman's scale — it's one of India's largest spinning companies — ...