In May, India had waived the 11% import duty on cotton from June 1 to October 31.
The extension is expected to provide textile and apparel manufacturers greater flexibility in sourcing raw materials, ease input cost pressures, and support micro, small and medium enterprises (MSMEs), said the textiles ministry in a statement.
It added that the move also aims to strengthen the competitiveness of Indian textiles in domestic and international markets.
The Department of Revenue under the Ministry of Finance notified the extension.
Domestic cotton prices, which generally ease as fresh crop arrivals begin in October, have stayed firm this year amid concerns over monsoon-related production losses, leading textile mills to seek an extension.
The ministry said the decision intends to improve domestic cotton availability, meet the industry’s special cotton requirements and encourage greater value addition across the textile and apparel value chain.
It noted that the extension is also expected to ensure uninterrupted raw material supplies and improve operational flexibility for the textile industry.