Budget 2025: Key takeaways for India’s textile industry
To protect domestic manufacturers, the customs duty on knitted fabrics has been revised to 20 per cent or Rs 115 per kilogram, whichever is higher.
The Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman, introduced several initiatives aimed at bolstering India’s textile sector;
Mission for cotton productivity: Five-year mission has been launched to enhance the productivity and sustainability of cotton farming, with a particular focus on extra-long staple (ELS) cotton varieties. This initiative aims to provide farmers with advanced scientific and technological support to improve yields and promote high-quality cotton cultivation.
Support for Micro, Small, and Medium Enterprises (MSMEs): The budget proposes raising investment and turnover limits for MSMEs, along with enhanced credit access. Notably, micro enterprises will have access to credit cards with limits up to Rs 5 lakh, facilitating easier access to funds for small-scale textile businesses.
Customs duty adjustments: To protect domestic manufacturers, the customs duty on knitted fabrics has been revised to 20 per cent or Rs 115 per kilogram, whichever is higher. This measure is expected to make imported fabrics less competitive, thereby supporting local textile producers.
Leather sector incentives: The leather industry, closely linked to textiles, will benefit from duty exemptions on Wet Blue leather and crust leather. This move aims to enhance the competitiveness of domestic leather manufacturers.
Focus product scheme for footwear and leather: New scheme has been announced to boost the productivity, quality, and competitiveness of India’s footwear and leather sectors. The initiative aims to create employment opportunities for 2.2 million individuals, generate a turnover of Rs 4 trillion, and achieve exports exceeding Rs 1.1 trillion. These measures reflect the government’s commitment to strengthening the textile industry, enhancing farmer incomes, and promoting sustainable practices within the sector.
