Textiles at the forefront: Industry reactions to Union Budget 2026–27
The Union Budget 2026–27 has drawn wide-ranging reactions from across India’s textile, apparel, retail and advisory ecosystem, reflecting cautious optimism and long-term confidence. Industry leaders broadly welcome the Budget’s integrated approach spanning fibre security, cluster modernisation, skilling, sustainability and infrastructure creation. The emphasis on National Fibre Scheme, SAMARTH 2.0, mega textile parks, technical textiles and MSME support is seen as critical to improving competitiveness, employment generation and export readiness. While stakeholders flag the need for effective implementation and cost competitiveness, the consensus is that the Budget lays a strong foundation for a more resilient, future-ready textile value chain.
Priyavrata Mafatlal, Vice-Chairman, Arvind Mafatlal Group
“This Budget marks a very important tone in the emerging Indian economy during a global shift in supply chain realignments. The Finance Minister’s focus on self-reliance, competitiveness, and jobs in the textile sector is a positive development for the sector’s operating dynamics and planning visibility for manufacturers and exporters. The Budget’s continued support for fiber supply and the clear thrust towards scale and value addition will help stabilize input costs, improve margins, and enable companies to take a positive call on capacity expansion and export commitments. The thrust on modernization of textile clusters and technical and value-added manufacturing is expected to improve productivity, quality, and speed-to-market, which are critical drivers of global competitiveness.
Today, there is no doubt that there is a gap between the availability of jobs and the demand for skilled manpower in the industry. To position India in the global employability index, it is essential that there is upskilling of both the existing and new workforce in technology, digital, and AI skills. The Budget’s emphasis on education, employment, and enterprise will definitely help bridge this gap by ensuring that skilling is aligned with the needs of the new manufacturing sector, where automation, digital engineering, and technology-driven services are increasingly integrated. For Mafatlal Industries, such a vision will help invest more in advanced manufacturing, sustainability, and innovation, while developing a future-ready workforce to fuel their long-term export agenda.”
Sanjay Jain, Group CEO, PDS
“We welcome the integrated vision for the Indian textile and apparel sector outlined in the Union Budget 2026. As a sector that provides direct employment to over 45 million people and supports nearly 100 million livelihoods indirectly through allied industries and MSME clusters, these measures are both timely and impactful. The continued thrust on public capex, creation of champion MSMEs, and targeted support for labour-intensive sectors like textiles will significantly strengthen India’s global competitiveness.
The launch of SAMARTH 2.0 is a positive step towards modernising the skilling ecosystem through deeper collaboration between industry and academic institutions, while enhancing productivity across export-oriented clusters. At PDS, we are deeply committed to building a learning-driven culture through a structured three-tier learning and development framework. Our approach is anchored in the globally recognised 70-20-10 learning model, where the majority of learning takes place on the job, supported by peer and mentor interactions and formal training programmes.
Further, the Text-ECON initiative sends a strong signal of India’s ambition to emerge as a global hub for sustainable and value-added textiles. The renewed focus on PM MITRA mega textile parks, along with targeted capital support and infrastructure upgrades for traditional clusters, is expected to drive higher investments and accelerate sectoral growth. These measures will also strengthen domestic manufacturing by reducing import dependence and promoting the production of man-made fibre (MMF) apparel and technical textiles.
We believe these initiatives will also help boost exports and reduce logistics costs, further enhancing the competitiveness of Indian textiles in global markets. This Budget reinforces confidence in India’s journey towards becoming a globally integrated, high-quality manufacturing hub under the vision of Viksit Bharat. “
Darshan Dudhoria, CEO, Indian Silk House Agencies
The Union Budget 2026 offers a thoughtful and forward-looking vision for India’s handloom and textile ecosystem, reaffirming textiles as a sector where heritage, livelihoods, and economic growth converge. By positioning textiles as a strategic, employment-intensive pillar, the Budget recognises the quiet strength of a craft legacy that has sustained communities for generations and now stands ready to scale with purpose.
Initiatives such as the National Fibre Scheme, the Textile Expansion and Employment Scheme, and the National Handloom and Handicraft Programme honour India’s rich textile traditions while creating the scaffolding for modernisation, market access, and long-term competitiveness. For Indian Silk House Agencies, this direction enables us to deepen our work with over 15,000 + artisans, revitalise traditional clusters, and strengthen integrated value chains spanning fibre, design, manufacturing, and retail.
The emphasis on technology upgradation, testing and certification infrastructure, and global linkages aligns closely with our commitment to building craft-led brands rooted in trust, quality, and contemporary relevance. Equally encouraging is the continued push on public capital expenditure and infrastructure in Tier 2 and Tier 3 cities emerging centres of aspiration and consumption where improved connectivity, skilling, and access to finance will unlock new pathways for MSME retail and artisan enterprises.
Taken together, this Budget lays a durable foundation for private investment, resilient rural livelihoods, and globally admired Indian textile brands. It marks a defining moment to weave India’s handloom and heritage sectors into the fabric of the nation’s consumption-led growth story.
Madhu Sudhan Bhageria, Chairman and Managing Director, Filatex India
“We see the Union Budget 2026-27 as a comprehensive and forward-looking framework for strengthening India’s textile ecosystem, particularly through its integrated approach to fibers, manufacturing, skilling and sustainability. The proposed National Fibre Scheme, with its focus on man-made fibres alongside natural and new-age fibres, is a timely recognition of how the global textile industry is evolving and of India’s growing role within it.
We believe initiatives such as the Textile Expansion and Employment Scheme and SAMARTH 2.0 can play a meaningful role in modernising clusters, upgrading technology and building a skilled workforce aligned with industry requirements. For manufacturers, this emphasis on capital support, testing infrastructure and skilling is critical to improving productivity, quality and global competitiveness.
For a company like Filatex India, which operates at the upstream end of the man-made fibre value chain, these measures support a more robust downstream ecosystem, improve demand visibility and encourage long-term investments in capacity, quality and value-added products. The emphasis on the Text-ECON initiative further reinforces the industry’s shift towards sustainable and globally competitive textiles, a direction that is closely aligned with Filatex’s ongoing focus on circular recycling, responsible manufacturing and traceability through its Ecosis sustainability platform.
Overall, we believe the Budget lays a strong foundation for a more resilient, globally competitive and sustainable textile industry, encouraging capability building and investment across the value chain.”
Sushil Pasricha, Partners at Bain & Company in India
Pasricha has shared his perspectives on key measures impacting India’s electronics and semiconductor ecosystem. Please find their detailed quotes below for your reference:
“Textiles receive a fibre-to-finished reset, with technical textiles emerging as the key margin lever. Integrated parks, coupled with testing and skilling, can position India as a higher-value, export-grade supplier. This Budget seeks to shift the sector away from commodity cycles toward application-led growth, driven by technical textiles, stronger compliance, and improved buyer readiness.”
K Srikumar, Senior Vice President & Co- Group Head, ICRA
An integrated set of proposals for the Textiles sector covering fibres, handlooms, technological improvement, sustainability, upskilling and modernization is expected to make the employment-generating textile sector more resilient. Setup of mega textile parks, fillip for technical textiles, and promotion of handloom and handicraft segments under the Mahatma Gandhi Gram Swaraj initiative, will enable the industry becoming future-ready and globally competitive. Further, the time-line extension for exporters to 1-year from 6-months, is a reprieve for the textile exporters, which has been under pressure following the sharp rise in US tariffs.
Amar Nagaram, Co-founder, VIRGIO
The Budget makes it clear that India’s next phase of growth will be driven by the convergence of design, technology, and sustainability. The strong emphasis on sustainable textiles, MSME scale-up, AI-led innovation, and design education reflects a long-term vision to move Indian manufacturing up the global value chain. For consumer and fashion brands, this creates a more enabling ecosystem, one that supports responsible production, data-driven decision-making, and global competitiveness. By balancing manufacturing depth with investments in skills, services, and digital infrastructure, the Budget accelerates India’s shift from volume-led growth to value- and innovation-led growth, positioning the country as a credible global hub for future-ready fashion and lifestyle businesses.
Abhinav Kumar, Co-Founder, Brand Concepts Ltd.
The Union Budget 2026‑27 lays out a forward-looking path for India’s retail and fashion ecosystem, reinforcing domestic manufacturing, innovation and brand competitiveness. Initiatives like the integrated textile programme, mega textile parks, MSME support and improved logistics create a stronger, more resilient supply chain for domestic and global brands in our portfolio.
By fostering expansion into Tier‑II and Tier‑III cities, enabling digital and financial infrastructure and supporting high-quality production, the Budget provides the roadmap for Brand Concepts to scale efficiently, innovate responsibly and strengthen India’s position as a hub for future-ready fashion and lifestyle businesses.
Sammir Dattani, Executive Director, Sanathan Textiles
The budget scores 8/10 and sends a clear and encouraging message for the Indian textile sector, with a renewed focus on strengthening the value chain from fibre to finished products. By prioritising integrated development through proposed development of mega textile parks, technology upgradation, skilling, and sustainability, the Budget reinforces textiles as a long-term growth engine for employment, exports, and manufacturing resilience.
For yarn manufacturing in particular, the emphasis on fibre self-reliance, modernisation of clusters, and support for man-made and technical textiles creates a strong foundation for scale, efficiency, and global competitiveness.
Looking ahead, the policy direction supports a shift toward higher-value yarns, sustainable processes, and technology-driven manufacturing. This not only strengthens margins but also future-proofs the industry against volatility in raw materials and global demand cycles.
Overall, the Budget reflects confidence in India’s textile ecosystem and lays the groundwork for yarn manufacturers to grow responsibly, innovate consistently, and compete successfully on the world stage.
Suketu Shah, CEO, Vishal Fabrics
“The Union Budget 2026-27 provides a well-balanced and forward-looking roadmap for the textile industry in India, stressing upon on self-sufficiency, modernization, and employment generation. The integrated approach to the National Fibre Scheme, the Textile Expansion and Employment Scheme, and the focus on cluster development is a recognition that the competitiveness of the industry can be improved by making the value chain stronger.
The focus on fibre security in natural, man-made, and new fibres tackles the existing challenge in the industry regarding input volatility and quality, which is essential for capacity planning and export competitiveness. On the other hand, the call for the modernization of the traditional textile sector through technology upgradation, joint testing facilities, and certification assistance will ensure that the gap between the country’s manufacturing capabilities and new global standards is bridged.
The shift in focus to Samarth 2.0 is a move made in the right direction towards developing an industry-ready workforce that is in line with automation, efficiency, and scale. Further, the challenge mode development of mega textile parks along with the SME Growth Fund of ₹10,000 crore will definitely have a positive impact on the MSME sector. On the whole, the Budget has created a robust foundation for a resilient and future-ready textile sector and is a confidence booster for the entire textile value chain in India.”
Sidhant Keshwani, Founder and CEO of Libas
The Union Budget 2026-27 presents a visionary, long-term roadmap for India’s textile industry. By focusing on Mega Textile Parks and the National Fibre Scheme, the government is building the infrastructure needed to turn India into a global fashion leader. These steps will provide a massive boost to the sector, helping it transition from traditional roots to a modern, high-speed manufacturing powerhouse.
The new Text-ECON initiative and modernization schemes directly address the industry’s need for better technology and global competitiveness. Furthermore, programs like SAMARTH 2.0 and the Mahatma Gandhi Gram Swaraj Initiative will empower our artisans, linking traditional crafts with global markets.
At Libas, we have always focused on speed and scaling Indian wear. We welcome this budget as it tackles key industry pain points like skilling and supply chain gaps. These measures will help accelerate the growth and take Indian fashion to the world stage.
Kumar Rajagopalan, CEO, Retailers Association of India
Union Budget 2026–27 is not designed to stimulate consumption in the short term. Instead, it focuses on shaping the operating environment for retail through fiscal consolidation, infrastructure investment, MSME enablement, skilling, and regional growth. For the retail sector, its impact will be gradual and uneven, driven more by improvements in supply chains, workforce readiness, and rural and non-metro demand than by direct policy support.
Rajeev Gupta, Joint Managing Director, RSWM
The Union Budget 2026–27 presents a decisive and reform-led roadmap for the textile sector, firmly positioning it within India’s strategy to scale manufacturing, reduce import dependencies and generate employment. The announcement of an Integrated Programme for Textiles, with clearly defined sub-parts, reflects a holistic policy approach that addresses the entire value chain, from fibre security to skilling, sustainability and global competitiveness.
The National Fibre Scheme is particularly significant in strengthening self-reliance across natural, man-made and new-age fibres, while mitigating supply-chain vulnerabilities amid global disruptions. Complementing this, the Textile Expansion and Employment Scheme will accelerate modernisation of traditional clusters through technology upgradation, testing and certification infrastructure, directly enhancing productivity, quality and formal employment, especially in MSME-led regions.
The consolidation of handloom and handicraft interventions, along with the Mahatma Gandhi Gram Swaraj Initiative, reinforces inclusive growth by strengthening artisans, weavers and rural enterprises through market access, branding and skilling. The continued focus on Samarth 2.0, Tex-Eco and mega textile parks, particularly with an emphasis on technical textiles, signals strong intent to future-proof the sector. With effective implementation, these measures can significantly strengthen India’s position as a globally competitive, sustainable and resilient textile manufacturing hub.”
Kanishk Maheshwari, Co-Founder & Managing Director, Primus Partners
“Textile Sector has been in the major spotlight among the sectors, especially the focus building modernized infrastructure and skill upgradation. This strategic focus will provide a significant boost to foreign investments and link our indigenous textile units to the global value chain.”
Durai Palanisamy, Chairman, The Southern India Mills’ Association (SIMA)
Indian textile industry being the second largest employment provider, next only to agriculture and providing jobs to over 105 Million people, especially for the rural masses and women folks, the Union Government has set a target of increasing the textile business size from the current level of $179 Billion to $350 Billion and exports from $38 Billion to $100 Billion by 2030, attracting new investments to the tune of $100 Billion and create new jobs for around 20 Million people, apart from sustaining the existing jobs. The Government of India has set a target of increasing the business size to $2.4 Trillion, including $600 Billion exports and marching towards Viksit Bharat 2047. To facilitate achieving these ambitious targets, the Government has been taking numerous pathbreaking policy initiatives by addressing the structural issues, concluding the Free Trade Agreements with EU, UK, Australia, UAE and several other countries in a record time and continuing the negotiations with several other countries and thereby enhancing global competitiveness.
Some of the major historic reforms and policy initiatives enhancing the global competitiveness include slotting the entire textile value chain in the lowest GST slab of 5 per cent, removing anti-dumping duty on all man made fibre raw materials, fibres and filament yarns, removal of Quality Control Orders imposed on man-made fibres, yarns, MMF raw materials and textile machinery, exempting the extra-long staple cotton from 11 per cent import duty, etc.
National Technical Textile Mission, Production Linked incentive, Mission for Cotton Productivity, PM MITRA Park Scheme, etc., are already in vogue and implementation of the new Labour Codes are some of the historical initiatives of the Government to fuel the growth of textile industry. The Union Budget 2026-27 has again given a thrust to fuel the growth of the textiles and clothing industry.
In a press meet held today, Palanisamy, has stated that the Government has given importance for the growth of the textile industry by announcing National Fibre Scheme that focus on strengthening the availability of raw materials including man-made fibres and new age fibres. He has pointed out that the Government has already allocated Rs 59 billion under “Mission for Cotton Productivity” that covers new age fibres. Man-made fibres being the growth engine and there being a huge potential to increase the market shares in all the FTA signed countries, the scheme would provide opportunities to capture the new markets.
SIMA Chairman has stated the announcement of Capital Support Scheme for Modernisation would enable the industry to enable the industry to upgrade the technology. He has pointed out that the Technology Upgradation Fund Scheme, flagship programme of the GoI had attracted around Rs.4 lakh crores new investment and now the investments had dwindled down as the TUF scheme was discontinued since 1st April 2022. He stated that given the high capital costs and the capital-intensive nature of India’s textile industry, the dedicated capital support scheme would enable the sector to attract the envisaged investment of USD 100 billion by 2030.
Durai has said that Samarth Scheme 2.0, an exclusive skill development scheme for the textile industry would continue to train the unemployed youth and provide jobs. He has said that the proposal of establishing training institutes and strengthening the skill development in the educational institutions would enable the industry to improve productivity and meet the skill requirements of the age machines and processes.
Coastal cargo scheme, allocation of Rs 100 billion for manufacturing, announcement of high speed rail corridors, scheme for emerging technologies and AI would also help the textile industry to enhance its global competitiveness, says Durai
Durai has stated that the Budget could have considered the removal of 11% import duty on cotton as the same is essential to meet the quality cotton shortage and meet the export commitments. He has said that the duty exemption was available till 31st December 2025 and trade has started adopting the import parity price and the price has already increased by around 5 per cent when compared to the international price (Cotlook A) and 15 per cent higher than Brazilian cotton and the price gap is likely to widen in the coming months and would affect the financial viability of entire textile value chain that provides direct jobs to around 35 million people and accounts around 75 per cent of the total textiles and clothing exports.
Durai has pointed out the farmer is fully protected under the Minimum Support Price, the cost of which is almost higher by 20 per cent when compared to the international cotton price. Cotton did not attract duty since August 2008 to February 2021 and the imports never affected the farmers and India could export 30 to 100 lakh bales of cotton per year during the season and the industry could import the cotton during off season that enabled win-win strategy for all the stakeholders, says Durai. He has urged the Prime Minister to remove the 11 per cent import duty on all varieties of cotton and enable the industry to achieve the vision set by the Government.
Ashwin Chandran, Chairman, CITI
The Budget is a strong manifestation of the Government’s commitment to future-proof the textile and apparel sector, make it more resilient to global headwinds, and comes as a huge shot in the arm for the industry. We convey our heartfelt gratitude to the Prime Minister, the Finance Minister, the Textiles Minister and all senior officials for announcing measures that will help the textile and apparel industry attain greater heights, emerge in a stronger position to contribute to the Viksit Bharat (developed India) mission, and create more and better-quality jobs.
The CITI Chairman said the launch of the National Fibre Mission, announcements about the Mahatma Gandhi Gram Swaraj Initiative, Tex-Eco Initiative, establishment of mega textile parks in challenge mode, textile expansion and employment to modernise traditional clusters, National Handloom and Handicrafts Programme, and the SAMARTH 2.0 skill development scheme will help local manufacturers become more efficient, innovative and sustainable, and expand their presence in global markets.
Referring to the three Kartavya that inspired the Budget, Shri Chandran observed, “The first Kartavya focuses on improving cost competitiveness. While we are studying the proposal, no direct announcement for the removal of import duty was made towards improving the cost competitiveness of Indian cotton-based products, which accounts for about 60% of India’s total textile and apparel market.”
The CITI Chairman welcomed the Government’s emphasis on nurturing champion MSMEs and supporting micro enterprises, noting that the textile and apparel sector is predominantly MSME-driven. However, he pointed out that the industry has consistently sought a dedicated investment incentivisation scheme, particularly to support MSMEs in transitioning towards sustainable production models, which will also help in leveraging the upcoming India-EU FTA. “While the details of the Tex- Eco initiative are awaited, the absence of a direct investment support mechanism is felt,” he said.
The proposal to extend the time period for export of final product from the existing 6 months to one year for exporters of textile garments, enhanced focus on improving logistics through freight corridors, the decision to establish a High-
Level Committee on Banking for Viksit Bharat, and simplification of export- import procedures are also particularly welcome, he added.
“On its part, CITI reiterates its commitment to work closely with the Government to ensure effective implementation of the announced measures, keeping in mind the national aim of creating a $350 billion textile and apparel industry by 2030, including achieving exports worth $100 billion by that period,” Shri Chandran said.
India’s textile and apparel industry is the second-biggest generator of jobs and livelihoods in the country. It is also a significant contributor to the GDP and the nation’s overall exports.
The textile and apparel sector has been adversely affected by the 50% US tariff on Indian goods, effective August 27, 2025, which has put exports worth billions of dollars and millions of jobs at risk. The US is the single-largest market for India’s textile and apparel exports. At nearly $11 billion, India’s exports of textile and apparel items to the US accounted for close to 28% of the country’s total exports of these products in the financial year 2024-25.
