24 June 2026
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). This IAN follows the Indian Government’s announcement of a temporary tariff exemption on the import duty on cotton.
Summary of Changes and key points
- On 30 May 2026, the Indian Government published a notification to exempt cotton from applicable tariffs from 1 June 2026 until 31 October 2026.
- The exemption does not change the AI-ECTA cotton tariff rate quota (TRQ) requirements or administration under the Rules 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.
- The reclamation day for cotton for export to India is 31 July. Under Section 40(3) of the Rules, exporters need to have used at least 25% of their allocation before 31 July or remaining quota will be revoked.
- TRQ allocations for 2027 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 2024 to 31 October 2026.
- Exporters may receive an allocation penalty for the 2027 quota year if they have not utilised 90% of their TRQ allocation by 15 November 2026.
- The penalty is at a ratio of 1:1. For example, where an exporter holds 200 tonnes of unused quota at the end of 15 November 2026, and has not utilised at least 90% of their 2026 allocation, a debit of 200 tonnes (penalty) will be applied to their 2027 allocation.
- Exporters can choose to voluntarily return TRQ they will not use in 2026 until 15 November 2026. The returned TRQ will not count towards 2027 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 entering India before 31 October 2026
- 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).
Further details regarding the TRQ administration are available on the India cotton quota page of the department’s website.
Contact information
If you have any questions regarding this IAN, please email Quota Administration Unit.
Christine Mulhearn
Assistant Secretary
Meat Exports Branch