Textile industry welcomes Budget 2026–27's focus on capacity, MSMEs

The Budget reinforced the government’s focus on manufacturing-led growth through continued capital expenditure, targeted support for MSMEs, simplified trade procedures and measures aimed at improving ease of doing business. These initiatives are expected to strengthen domestic capacities, enhance competitiveness and support employment generation across labour-intensive sectors such as textiles and apparel.

Sanjay K Jain, Chairman of the ICC National Textile Committee, said the announcements related to the textile and clothing industry are clearly geared towards preparing the sector to capitalise on opportunities emerging from newly signed FTAs. “The focus on capacity building will help the industry position itself for higher exports and value addition,” he said.

RK Vij, President of the Textile Association of India and Secretary General of the Polyester Textile Apparel Industry Association, noted that the Budget places particular emphasis on capacity expansion in textiles and technical textiles, alongside increased support for MSMEs. He added that reforms such as GST and QCOs, combined with improved import-export facilitation and policy continuity, would help the industry leverage upcoming opportunities from FTAs, including with the EU. Vij, however, pointed out that the industry had expected changes in customs duties on cotton, man-made fibres and other fibres where domestic capacities are either surplus or constrained.

Ashish Gujarati, Past President of the Southern Gujarat Chamber of Commerce and Industry, described the Budget as “overall positive for textiles,” highlighting its long-term approach towards strengthening the sector’s fundamentals.

Jay Prakash Pathak, President of the Bombay Yarn Merchants Association, said the Budget supports the modernisation of the textile industry, which remains the second-highest employer in the country after agriculture.

At the micro level, Bharat Shah of Tejas and Company from Bhiwandi, said the measures announced would help improve the overall business environment for textile units. “It is a good initiative and a true step towards strengthening the textile sector at the grassroots level,” he said.

Fibre2Fashion News Desk (KUL)