Budget 2026–27 rolls out integrated push for textile jobs, exports

Government unveils fibre-to-fashion roadmap to boost jobs and exports.

The Union Budget 2026–27 has announced a major policy push for the labour-intensive textile sector, underlining its importance in employment generation, exports, rural livelihoods and sustainable manufacturing. The government has proposed an integrated framework to strengthen the textile value chain, spanning fibres, manufacturing, skilling, sustainability and exports.

At the core of the announcements is an Integrated Programme for the Textile Sector, comprising five sub-components. The National Fibre Scheme aims to enhance self-reliance across natural fibres such as silk, wool and jute, along with man-made and new-age fibres, reducing import dependence and supporting innovation. The Textile Expansion and Employment Scheme will focus on modernising traditional clusters through machinery support, technology upgradation and common testing and certification facilities to improve productivity and generate large-scale employment.

Existing handloom and handicraft schemes will be consolidated under a National Handloom and Handicraft Programme to provide targeted support to weavers and artisans, improve incomes and preserve traditional skills. The Tex-Eco Initiative will promote environmentally sustainable and globally competitive textile and apparel manufacturing, while Samarth 2.0 will upgrade the skilling ecosystem through stronger industry–academia collaboration.

The Budget has also proposed setting up Mega Textile Parks in challenge mode, with an emphasis on integrated infrastructure, scale efficiencies and value addition, including support for the high-growth technical textiles segment. To strengthen rural and village industries, a Mahatma Gandhi Gram Swaraj Initiative will focus on branding, quality improvement, training and global market linkages.

On the exports front, the export obligation period for select textile and leather products manufactured using duty-free imported inputs has been extended from six to 12 months, providing exporters greater flexibility and easing working capital pressures.

To improve liquidity for textile MSMEs, measures have been announced to strengthen TReDS, including mandatory use by CPSEs, credit guarantee support through CGTMSE, GeM–TReDS integration and securitisation of TReDS receivables. A ₹10,000-crore SME Growth Fund has also been introduced to create future “Champion SMEs.”