India Budget 2025-26: Industry overjoyed on several measures

Dr SK Sundararaman, Chairman, The Southern India Mills’ Association (SIMA) has welcomed the budget and stated that the various announcements made in the budget would enhance the global competitiveness of the textile industry. He has stated that cotton being the growth engine and strength of the Indian textile industry—accounting for around 80 per cent of the textile exports, the industry has been demanding for a Cotton Technology Mission supporting high yielding seed technology, adoption of global best agronomy practices, producing clean cotton, and branding Indian cotton to benefit the farmers and the industry. 

“The announcement of ₹600 crore to improve productivity and sustainability of cotton, promote ELS cotton and best of science & technology to cotton farmer on a mission mode approach giving thrust for high yielding seeds to align with 5F Vision of Prime Minister Narendra Modi is a step in right direction,” says SIMA chairman.

He stated that the country was producing around 25 lakh bales of extra-long staple (ELS) cotton during 1980s when the crop was remunerative to the farmers. However, it is currently producing only around 5 lakh bales, while the industry has potential to consume 30 lakh bales. He pointed out that the value addition in the ELS cotton textile product is around ten times and has huge potential to boost export if the home-grown ELS cotton is made available.

SIMA chairman claimed that the predominantly MSME nature of the textile industry would benefit out of upward revision of MSME sales turnover criteria by two times and the investment limit by 2.5 times, and thereby become eligible to avail the various fiscal and non-fiscal supports extended for the MSMEs. He added that the levy of 20 per cent import duty or ₹115 per kg, whichever is higher, on knitted fabrics would curb the cheaper imports from China and other countries and increase the demand for fibres, yarns and fabrics produced indigenously. He welcomed the extension of customs duty exemption on shuttle-less looms, knitting, nonwoven and garmenting machines including their parts, spares and accessories till March 31, 2027 from March 31 this year, would benefit the industry.

SIMA chairman also welcomed the Export Promotion Mission facilitating easy access to export credit, cross border factoring support, and support to tackle non-tariff measures such as sustainability and climate certifications, which would greatly benefit, particularly the MSMEs. He welcomed the various other announcements pertaining to credit guarantee scheme for MSMEs and the new mechanism for facilitating continuation of bank credit to MSMEs during their stress period etc, skill development initiatives, infrastructure development schemes including maritime, non-conventional energy, power sector, etc. He said that the budget provisions would enhance global competitiveness.   

KM Subraminian, President, Tiruppur Exporters Association has said that increase in budget allocations towards textiles and apparel is primarily directed towards the Amended Technology Upgradation Fund Scheme (ATUFS) and the Production Linked Incentive (PLI) scheme, which will ensure faster flow of incentive funds to the industry. The five-year Cotton Mission will boost productivity and production. Currently, India faces a cotton shortage, with one of the lowest yields globally at 450 kg per hectare, compared to the global average of 800 kg per hectare. This initiative is expected to provide a significant boost to the cotton-based textile industry. A flat 20 per cent import duty or ₹115 per kg (whichever is higher), will eliminate scope for leakages. This will curb the influx of undervalued fabrics into the country and benefit the local MMF based industry. Duty exemption on shuttle-less looms is expected promote modernisation and efficiency in the sector.

The consumption-driven budget was focused on increasing disposable income for the middle class, which is expected to drive higher consumption of apparel and home textiles. Focus on MSMEs and women entrepreneurs will also directly impact textile manufacturing, fostering growth and inclusivity. as the textile industry is predominantly composed of MSMEs, with a significant number of women entrepreneurs.

Bhadresh Dodhia, Chairman, MATEXIL (Manmade and Technical Textiles Export Promotion Council), stated, “The Budget is positive, pragmatic, growth-oriented and in line with contemporary requirements and is well-positioned to drive growth in the textiles sector.” He said that reclassification of criteria for MSMEs, both in terms of investment and turnover would empower predominantly MSME units to achieve scale, enhance competitiveness, and contribute significantly towards making India a global manufacturing hub for textiles.

Changes in tariff on knitting fabric and additions of two more types of shuttle-less looms would enhance the textile sector’s export competitiveness, according to the chairman, MATEXIL. He also appreciated the increased fund allocation for key government schemes such as RoDTEP (Remission of Duties and Taxes on Exported Goods), RoSCTL (Rebate on State and Central Taxes and Levies), and Production-Linked Incentive (PLI) Scheme for textiles. He expressed confidence that these initiatives will boost the export potential of man-made fibre textiles and technical textiles and would strengthen India’s position in the global markets.

Fibre2Fashion News Desk (KUL)