Textile sector-related companies witnessed exceptional buying interest on Monday, with shares rallying up to 13% during intra-day trading. The rally was triggered by the Ministry of Finance's decision to suspend import duty on cotton from June 1 to October 31, 2026. The move is expected to provide much-needed relief to the textile industry by easing input cost pressures for manufacturers, particularly benefiting small and medium enterprises that face the most pressure from rising raw material costs.
Indo Count Industries emerged as the top performer, surging more than 13% to a 52-week high of ₹353.90 on the NSE, while Vardhman Textiles rallied nearly 8% to ₹622. Gokaldas Exports shares zoomed over 6% to ₹734.80 on the NSE, and Arvind Ltd climbed more than 6% to hit a fresh 52-week high of ₹502.80. Welspun Living gained 5% to ₹146, demonstrating broad-based investor confidence across the textile sector. According to The Hindu BusinessLine, other textile counters such as Ambika Cotton Mills, Page Industries, Raymond Lifestyle and Kilitch Garments also witnessed strong buying interest during the session.
The rally demonstrated broad-based investor confidence across the textile sector, with Vardhman Textiles gaining 8%, followed by Trident at 5%. According to The Economic Times, KPR Mill rose 4%, while Gokaldas Exports hit ₹735 during the session. Welspun Corp and Arvind Fashions traded largely flat during the session. The strong performance reflects investor confidence in the duty relief measures and their potential impact on the textile sector, with the temporary exemption expected to lower input costs for textile and apparel manufacturers.
The Ministry of Finance announced on May 30 that all customs duties on cotton imports would be exempted from June 1, 2026, to October 31, 2026. As reported by The Economic Times, the notification stated that the 11% duty will not be levied during this period. The Central Government said the measure aims to augment availability of cotton for the Indian textile sector, with the temporary duty exemption expected to reduce input costs across the textile and apparel sector. The decision comes amid concerns over tight cotton supplies and rising prices, which have increased production costs for textile firms. The exemption includes complete removal of the 5% Basic Customs Duty (BCD) and 6% Agriculture Infrastructure and Development Cess (AIDC) on imported cotton, along with complete exemption from the 'Agriculture Cess' levied under Section 124 of the Finance Act, 2021.
The positive sentiment in textile stocks contributed to broader market gains, with the benchmark BSE Sensex trading at 75,028, up 252 points, or 0.34%. According to The Hindu BusinessLine, the measure is anticipated to have a positive impact on the performance of the domestic textile industry, especially small and medium enterprises, by ensuring better availability of cotton in the market while keeping domestic farmer interests in mind. Market participants said the temporary suspension could improve profitability for spinning mills, garment exporters and home textile manufacturers by ensuring cheaper raw material availability during the peak procurement season. The Confederation of Indian Textile Industry welcomed the decision, saying the temporary removal of the 11% cotton import duty would help India's MSME-dominated textile and apparel sector improve global competitiveness amid global headwinds. The industry body added that the move comes at a time when India is targeting textile and apparel exports of $100 billion by 2030, with the decision raising expectations of improved competitiveness for Indian textile exporters in global markets, especially amid demand recovery in key regions such as the US and Europe.
