19 September 2025
Purpose
This Industry Advice Notice (IAN) is to notify cotton exporters on current tariff arrangements and requirements under the Export Control (Tariff Rate Quotas – General) Rules 2021 (the Rules). These updates follow the Indian Government’s announcement of a temporary tariff exemption on the import duty on cotton.
Summary of changes and key points
- On 18 August 2025, the Indian Government published a notification that in public interest it would exempt cotton imports from applicable tariffs until 30 September 2025.
- On 28 August 2025, a subsequent notification was published extending the exemption until 31 December 2025.
- The exemption does not change requirements or administration under the Rules for the AI-ECTA cotton tariff rate quota (TRQ) even though product may enter India at 0% tariff without a TRQ certificate.
- Legislative provisions under the Rules for the AI-ECTA cotton TRQ remain applicable.
- Exporters can request a TRQ certificate and where the applicant has applied for a TRQ certificate and holds a TRQ entitlement the department will issue a TRQ certificate.
- Exporters can request a TRQ certificate be revoked (cancelled) by the department.
- TRQ allocations for 2026 will be based on an exporter’s eligible past exports where a consignment of cotton was exported to India and a TRQ certificate was issued in the period 1 November 2023 to 31 October 2025.
- Exporters may receive an allocation penalty for the 2026 quota year if they have not utilised 90% of their TRQ allocation by 15 November 2025. The penalty is at a ratio of 1:1. For example, if an exporter is holding 200 tonne of unused quota as at the end of 15 November 2025, and has not utilised 90% of their 2025 allocation, they will receive a 200 tonne debit penalty on their 2026 allocation.
- Exporters can choose to voluntarily return TRQ they will not use in 2025 until 15 November 2025. The returned TRQ will not count towards 2026 quota allocations.
- Exporters should be aware of the provisions under the Rules. It remains a commercial decision whether to:
- apply for TRQ certificates against consignments that will arrive in India before 31 December 2025
- return unused TRQ
- or leave their allocation balances as they currently are.
Background
The AI-ECTA entered into force in December 2022, providing Australia with a TRQ of 51,000 tonnes of cotton per year at a reduced in-quota tariff rate of 0%.
The India cotton TRQ is administered in accordance with the Export Control (Tariff Rate Quotas – General) Rules 2021. Once the quota is exhausted, any additional exports will be subject to India’s prevailing tariff rate.
The Notes for schedule of India and the Schedule of Tariff Commitments of India are available at Australia-India ECTA Annex 2A (Tariff Commitments) Section 2A (Tariff Schedule of India).
Details regarding the TRQ administration can be found on the India cotton quota webpage.
Contact information
If you have any questions regarding this IAN, please email Quota Administration Unit.
Christine Mulhearn
Assistant Secretary
Meat Exports Branch