Textile stocks experienced a significant rally on Monday, with Arvind leading gains at 6.44% to hit a 52-week high of ₹502.25 per share, followed by Vardhman Textiles gaining 6%, Nitin Spinners up 5.53%, Himatsingka Seide rising 5%, and Gokaldas Exports advancing 4%. According to Business Standard, other textile counters also witnessed strong buying interest, with KPR Mill rising over 6%, Kitex Garments advancing 2%, while Pearl Global Industries was also up 2%. However, the broader market showed mixed performance, with the benchmark BSE Sensex falling 639.61 points, or 0.84%, and the NSE Nifty slipping 171.55 points, or 0.72% during the holiday-shortened trading week. The rally reflects positive sentiment toward the government's cotton duty exemption policy, while other major sectors faced selling pressure.
The government announced the suspension of all customs duties on cotton imports from June 1 to October 31, 2026, with the Ministry of Finance issuing a notification on May 30 confirming the exemption. As reported by Business Standard, the 11% duty will not be levied during this period, with the ministry stating that "to augment availability of cotton for the Indian textile sector, the Central Government has temporarily exempted all customs duties on import of cotton from 1st June, 2026 till 31st October, 2026." This temporary measure is designed to increase the availability of cotton for the Indian textile sector and reduce input costs for textile and apparel companies. The finance ministry announced on Saturday that all customs duties on cotton imports will be waived from June 1, 2026 to October 30, 2026, specifically aimed at boosting cotton supplies for textile exporters amid strong global demand for yarn.
The ministry stated that the temporary duty exemption will help increase the availability of cotton for the Indian textile sector and reduce input costs for textile and apparel companies. According to Business Standard, the measure is anticipated to have a positive impact on the performance of the domestic textile industry, especially benefiting small and medium enterprises. Hariprasad K, a Sebi-registered research analyst and founder of Livelong Wealth, noted that the government's decision to temporarily remove the 11% customs duty and AIDC on cotton imports is a significant positive for India's textile sector. He emphasized that the move directly addresses the domestic cotton supply deficit while lowering raw material costs for manufacturers, as cotton accounts for nearly 65-70% of production expenses. Market participants expect the temporary duty waiver to improve raw material availability and support margins for textile manufacturers catering to export markets.
From a market perspective, spinning mills, textile manufacturers, and garment exporters are expected to be the biggest beneficiaries of this policy, as reported by Business Standard. Access to cheaper imported cotton can expand operating margins, improve export competitiveness, and support earnings growth over the coming quarters. The timing of the exemption is particularly important, as with domestic cotton arrivals remaining limited until the next harvest season, the policy helps bridge the supply gap without materially disrupting farmer realizations. The policy also allows Indian exporters to compete more effectively against manufacturing hubs such as Bangladesh and Vietnam, where access to lower-cost raw materials has often been an advantage. The move is specifically aimed at boosting cotton supplies for textile exporters amid strong global demand for yarn, ensuring better availability of contamination-free cotton for the domestic textile industry.
Following the announcement, textile stocks witnessed broad-based buying with Indo Count Industries surging 10.45%, while Raymond Lifestyle jumped 7.23%. Welspun Living gained 5.68%, Vardhman Textiles rose 5.35%, and Arvind advanced 5.11%. Among other gainers, Lux Industries climbed 4.69%, KPR Mill added 3.98%, Trident rose 2.66%, Gokaldas Exports gained 2.49%, Kitex Garments advanced 2.25%, Alok Industries moved up 2.12%, Jindal Worldwide gained 1.98%, and Pearl Global Industries rose 0.93%. The strong performance reflects investor confidence in the policy's ability to improve raw material availability and support margins for textile manufacturers.
