India Budget 2025-26: Tax relief may become boon for apparel retailers

Gautam Singhania, Chairman & Managing Director, Raymond Group stated, “The decision to exempt income tax up to ₹12 lakh is a game-changing reform that boosts India's middle class by increasing disposable income. This is expected to drive household spending—an essential growth engine for sectors like retail and real estate. Higher discretionary spending signals economic vitality, fuelling consumption-led growth and strengthening market dynamics. The Budget builds on this reform with targeted measures to fortify manufacturing, MSMEs, and domestic consumption. Enhanced credit access, sector-specific incentives for textiles and apparel, and streamlined compliance are set to boost industrial output. With the middle class now driving nearly 60 per cent of domestic consumption, rising purchasing power is likely to accelerate demand for aspirational and premium products. This holistic strategy positions the economy for sustained expansion by creating a strong synergy between consumer spending, industrial growth, and workforce empowerment.”

Sumit Arora, President (Apparel), at garment retailer Fab India Ltd said, “We welcome the government of India’s initiatives towards textile and cotton manufacturing. The Mission for Cotton Productivity will empower cotton farmers to improve production, sustainably. Further, special emphasis on boosting domestic production of textiles through different initiatives is a significant step towards strengthening ‘Make in India’ mission. We are confident that these new initiatives from the budget coupled with existing programmes like the Pradhan Mantri Vishwakarma Scheme will empower both the artisans and the textile industry at large.”

Ramesh Kapoor, Chief Financial Officer of garment retailer Numero Uno Clothing Ltd commented, “The budget presents a forward-looking approach to economic growth, with a clear emphasis on sectors like agriculture, rural economy, and renewable energy. From a retail sector perspective, the budget’s focus on boosting consumption through higher personal income tax exemptions and greater relief for senior citizens is a welcome move. This will undoubtedly increase disposable income and drive retail demand. Overall, the budget’s balanced approach to fiscal consolidation and consumption growth sets a positive tone for the retail sector and the broader economy, laying the foundation for sustainable growth in the years ahead.”

Amar Nagaram, Co-founder & CEO, VIRGIO, said, “The budget’s focus on fostering innovation, empowering MSMEs, and strengthening India’s digital economy is a step in the right direction. The five-year Mission for Cotton Productivity will strengthen raw material supply chain. Incentives for sustainable manufacturing and circular economy initiatives validate the growing shift towards responsible fashion. The significant enhancement of credit availability with guarantee cover for start-ups will provide crucial support for emerging businesses, while also generating employment opportunities. A progressive policy framework that supports startups will accelerate India’s journey to becoming a global hub for innovation and conscious consumption.”

Sanjay Vakharia, Founder and CEO, Spykar commented, “The budget leaves more money in the hands of the salaried person, boosting spends on discretionary items. Textiles, being one of the biggest discretionary areas, will benefit from added spends. Domestic industry will also benefit from flat duty structure on knitting fabric imports. Under invoicing will be under check in this environment.”

Achint Setia, CEO of online marketplace Snapdeal stated, “This budget is welcome news for crores of Indians in the middle- and lower-income brackets. By leaving more money in their hands and encouraging savings and investments, the budget is likely to add a strong push to retail consumption and economic growth.”

KV Srinivasan, Executive Director and CEO, Profectus Capital Private Limited said, “The budget has provided a significant boost to the MSME sector by significantly raising the thresholds for capital investment and turnover criteria for classification as Micro, Small, or Medium enterprises. Combined with the enhanced credit guarantee scheme, this move is expected to drive increased capital investment. This would help MSMEs to modernise and expand their operations. Improved credit flow for startups is also a very welcome move. With the personal tax burden also coming down sharply, the increased consumption power should help increase the overall demand for goods and services from MSMEs.”

Dhiresh Bansal, Chief Financial Officer at Meesho said, “We welcome the Budget 2025-26 for its strong push for MSME growth, digital commerce, and boosting consumption for mass Indians. Increasing the investment and turnover limits for MSME classification is a game-changer that will drive scale, innovation, and job creation. The big boost for sectors such as toys, footwear and many others will lead to improved domestic capabilities in manufacturing and exports. We also wholeheartedly welcome the paradigm shift in income tax, which will allow many more mass Indians to fulfil their aspirations. We at Meesho, remain committed to empowering millions of small entrepreneurs and look forward to the long-term impact of these reforms."

Fibre2Fashion News Desk (KUL)