Dr S K Sundararaman: Union Budget enhances global competitiveness for textile industry

      The textile industry is the second largest employment provider of the nation, next only to agriculture that provides jobs predominantly to rural masses especially women to the tune of 110 million and the Government has set a vision of increasing the textile business size from the current level of $162 billion to $350 billion and the exports from the level of $35 billion to $100 billion by 2030.  The NDA Government led by Prime Minister Narendra Modi having set a vision of 5Fs (Farm – Fibre – Factory – Fashion – Foreign) has been taking several pathbreaking initiatives to enhance the global competitiveness by addressing the structural issues.  The Union Budget 2025-26 has again made few important announcements specific to textiles and several other announcements that would greatly benefit the textiles and clothing industry.

            In a press release issued here today, Dr S K Sundararaman, Chairman, The Southern India Mills’ Association (SIMA) that represents the entire textile value chain in South India since 1933, 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 Indian textile industry accounting 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 Rs 6 billion to improve productivity and sustainability of cotton, promote ELS cotton and best of science and technology to cotton farmer on a mission mode approach giving thrust for high yielding seeds to align with 5F Vision of PM Modi is a step in right direction says Sundararaman.  He has stated that the country was producing around 2.5 million bales of extra-long staple (ELS) cotton during 1980s when the crop was remunerative to the farmers and currently producing only around 0.5 million bales and the industry has potential to consume 3 million bales.  He added that the industry is importing around 1.2 million bales of ELS cotton having 32.5 mm and above and textile business size of the ELS cotton value chain is estimated at around Rs 600 billion per year and giving direct jobs to around 1.2 million people.  He has 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.

Sundararaman has stated that the Ministry of Agriculture and Ministry of Textiles have already been operating on a Special Project on cotton covering 15,000 hectare of land in all the leading cotton producing States focusing on High Density Planting and ELS cotton productivity improvements and the pilot projects have revealed that there is a scope to increase the productivity from 30 to 50 per cent.  He has added that at the initiative of Government, the Cotton Textile Export Promotion Council (TEXPROCIL) jointly with other employers organisations has already launched “Kasturi Cotton Bharat” and the high quality Indian cotton is getting branded.

SIMA Chairman has claimed that the predominantly MSME nature of textile industry would be benefited out of upward revision of MSME sales turnover criteria by two times 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 has added that the levy of 20 per cent import duty or Rs 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 has welcomed the extension of customs duty exemption on shuttlelesslooms, knitting, non-woven and garmenting machines including their parts, spares and accessories till 31.3.2027 from 31.3.2025 which would benefit the industry.

Sundararaman 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 has 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.