HS Code Guide · EPM Subvention
HS Code 520100 Meaning — Cotton, not carded or combed: Global Trade, India & Factoring Guide
HS 520100 covers cotton, not carded or combed. This guide explains what the code includes, its global trade, India's position, how GIFT City helps factor it, and whether MSME factoring qualifies for the 2.75% interest subvention.
What this HS code covers
HS 520100 sits in 52 — Cotton. Official tariff description: “Cotton; not carded or combed” In plain terms, it covers cotton, not carded or combed. Classification decides duty and documents; this 6-digit line is in the DGFT positive list (Trade Notice 25/2025-26 Annex V), so MSME factoring under it qualifies for the 2.75% subvention — details below.
What is HS 520100?
HS 520100 covers raw cotton — not carded or combed — including ginned lint and raw fibre. Not yarn (5205) or fabric (5208–5212).
Official description: Cotton; not carded or combed
What HS 520100 does in trade
- Classifies raw cotton fibre — the base MSME export for spinning mills, distinct from cotton waste (5202) and yarn.
- Is eligible — cotton is in the positive list, so raw cotton factoring qualifies for 2.75%.
- Enables bulk commodity factoring with 60–90 day terms to spinning hubs.
Global perspective — where HS 520100 moves
Global raw cotton trade ~10 MT. US, Brazil and India are top exporters; Bangladesh, Vietnam and China are top importers for spinning.
| Top global exporters | Top global importers |
|---|---|
| United States | Bangladesh |
| Brazil | Vietnam |
| India | China |
| Australia | Pakistan |
| Uzbekistan | Indonesia |
India's stance on HS 520100
India is #1–2 cotton producer/exporter — Gujarat and Maharashtra hubs. Cotton Corporation and Texprocil oversee trade; MSME ginners export raw lint to Bangladesh/Vietnam mills.
Export docs to watch
Cotton needs Texprocil/Cotton Corporation registration, phytosanitary and HVI grading (staple, micronaire).
GIFT City — factoring HS 520100 in foreign currency
Cotton is bulk USD invoiced — GIFT City FC factoring with 2.75% suits spinning-mill terms.
Trad can route eligible invoices via an IFSCA-regulated IBU or Finance Company/Finance Unit undertaking factoring in GIFT City. The 2.75% subvention is identical whether you factor via India (RBI-regulated) or GIFT City (IFSCA-regulated) — the choice is about currency, banking relationship and buyer location, not the benefit rate.
Common financing stack for this HS
Factoring advances 70–90% in 24–48 hours after invoice verification; balance minus discount/fees on buyer payment. Works alongside packing credit — factoring covers the post-shipment open-account gap.
MSME subvention — is HS 520100 eligible for 2.75%?
Yes — HS 520100 is in the positive list (Trade Notice 25/2025-26 Annex V). MSMEs involved in international value chains with a valid active IEC (not in DEL) and valid Udyam can claim 2.75% per annum on the factoring interest cost element when factoring via an RBI/IFSCA-regulated entity.
| Check | For HS 520100 |
|---|---|
| In positive list (HS-6) | Yes — 520100 listed in Annex V |
| Benefit | 2.75% p.a. on interest cost element |
| Annual cap | ₹50 lakh per MSME per FY |
| Valid from | Prospectively from 20 Feb 2026 |
| Need UIN per factor? | Yes — declaration of intent before factoring, valid till FY-end |
| Eligible factors | RBI-regulated (AD bank / factoring NBFC) or IFSCA-regulated (GIFT IBU/FC) |
| Not covered | Deemed exports (FTP Ch.7) & exports to SEZs |
Eight-digit HS? Use first 6 digits
Eligibility is at HS-6. If your 8-digit HS (e.g. 52010010) starts with 520100, it inherits this eligibility. Verify on the HS checker — enter 6 or 8 digits.
Check HS 520100 — free
Verify any 6 or 8-digit HS against the DGFT positive list and see the 2.75% factoring eligibility in seconds.
Open HS checkerFrequently asked questions
What is HS 520100 — Cotton, not carded or combed?
HS 520100 covers raw cotton — not carded or combed — including ginned lint and raw fibre. Not yarn (5205) or fabric (5208–5212).
Is HS 520100 eligible for the 2.75% interest subvention?
Yes. HS 520100 is in the DGFT positive list (Trade Notice 25/2025-26 Annex V, 4139 HS-6 lines). MSMEs factoring exports under this line via RBI/IFSCA-regulated factors can claim 2.75% per annum on the interest cost element, capped at ₹50 lakh per MSME per year, prospectively from 20 Feb 2026. Requires valid IEC (not in DEL), valid Udyam, and a UIN per factor obtained before factoring.
Who can claim the 2.75% for HS 520100 and how?
MSMEs (as defined by Ministry of MSME) with active IEC and Udyam, factoring eligible exports of HS 520100 via RBI/IFSCA-regulated entities. File a declaration of intent on the DGFT portal to get a UIN per factor (valid till FY-end), factor the invoice, the factor files monthly IEC-wise claims; subvention is credited to your IEC-linked bank account.
Can HS 520100 be factored via GIFT City?
Yes. IBUs and Finance Companies/Finance Units undertaking factoring in GIFT City (IFSCA-regulated) are eligible financial institutions under IFSCA circular 19 Mar 2026 and must extend the 2.75% benefit. Useful for USD/EUR receivables where you want foreign-currency factoring.
What does factoring for HS 520100 cost after subvention?
Indicatively, factoring discount/interest is priced commercially (often 8–12% p.a. depending on buyer, tenor, currency) plus factoring fee ~0.5–3% ⚠️. The 2.75% offsets only the interest element — e.g. a 9% interest cost becomes ~6.25% effective on that element if eligible. Fees/insurance/FX remain. Compare all-in cost.
Related HS codes
Compare HS 520100 with other MSME-export lines in the same chapter or family.
See all codes on the HS code guides hub, or read the 2.75% subvention deep-dive.