Textile Stocks Jump 8% on Cotton Import Duty Waiver

Textile Stocks Rally as Cotton Import Duty Exemption Takes Effect Textile stocks gained up to 8% on June 1 after the government announced a customs duty exemption on cotton imports, effective immediately and running through October 30, 2026. The five-month window removes the existing 11% basic customs duty on raw cotton, a direct cost input that has pressured margins across spinning, weaving, and apparel segments for the better part of two years. [Gokaldas Exports](/stock/GOKALDAS) led the move among listed players, touching intraday highs consistent with an 8% surge. The timing isn't accidental. India's domestic cotton crop in 2024-25 came in at approximately 294 lakh bales, which fell short of consumption demand, pushed domestic prices higher, and squeezed manufacturers already navigating a choppy export environment. The duty waiver opens a cost-competitive import channel from the US, Brazil, and Australia, markets where cotton is currently priced at a discount to Indian MCX levels. This isn't a minor tweak. For spinning mills running at scale, raw material accounts for 60-70% of operating costs. Even a 5-6% reduction in effective input cost can shift EBITDA margins by 150-200 basis points at the operating level. That's the kind of number that moves stocks, and it did. Which Stocks Moved and Why It Matters [KPR Mill](/stock/KPRMILL) (NSE: KPRMILL) is arguably the most directly exposed beneficiary in the large-cap textile space. It runs an integrated model from cotton ginning through yarn, fabric, and garment manufacturing, which means cheaper cotton flows through every stage of its value chain. Vardhman Textiles (NSE: VTL) operates one of India's largest spinning capacities and imports a meaningful share of its cotton requirements. For VTL, import duty removal is a direct margin unlock, not a theoretical one. Trident (NSE: TRIDENT) works across home textiles and paper, with a significant yarn and terry towel business. Its exposure to export markets, particul...