The Union Budget for 2025-26 includes a 19% increase in the budget allocation for the Ministry of Textiles, reaching Rs 5,272 crore, up from Rs 4,417.03 crore in 2024-25. This funding aims to address key challenges and enhance the competitiveness of India’s textile industry, particularly its MSME-driven capacity (80% of the sector). The increased outlay will focus on boosting domestic productivity, reducing dependence on imports, and supporting the global competitiveness of the textile sector.
A major initiative is the five-year Cotton Mission, designed to raise cotton productivity, especially for extra-long staple varieties. Science and technology support for farmers under this mission will help stabilize raw material availability and increase farmer incomes.
In addition, the budget encourages domestic production of technical textile products like agro-textiles, medical textiles, and geotextiles by making duty on shuttle-less looms nil, which will modernize and enhance the weaving sector. The duty on Rapier Looms (below 650 metres per minute) and Air Jet Looms (below 1000 metres per minute) was reduced from 7.5% to 0%, lowering the cost of high-quality imported looms and supporting the Make in India initiative for technical textiles.
Knitted fabrics will also see a competitive boost, as the basic customs duty rate was revised from “10% or 20%” to “20% or Rs 115 per kg, whichever is higher.” This change is expected to curb cheap imports and enhance the competitiveness of Indian manufacturers.
Moreover, to facilitate handicraft exports, the export period has been extended to one year, with an additional three months’ extension, if necessary. India, being the sixth-largest exporter of textiles and apparel, exported textile products worth $34 billion in 2023, with the sector directly employing over 45 million people.
