Union Budget seen key to futureproof India’s textile sector: CITI

CITI seeks policy support to boost resilience, growth and exports

The Confederation of Indian Textile Industry (CITI) has called on the Union Budget to play a decisive role in futureproofing India’s textile and apparel sector by strengthening resilience, innovation and global competitiveness. The industry body believes targeted policy and regulatory reforms can help the sector navigate current challenges while unlocking long-term growth.

“Our optimism that the forthcoming Union Budget will significantly move the needle on policy and regulatory reforms is bolstered by the government’s steadfast commitment to the growth and development of India’s textile and apparel sector,” said Ashwin Chandran, Chairman, Confederation of Indian Textile Industry. He added that a budget focused on building a stronger growth ecosystem would also support the broader vision of Viksit Bharat. “The Budget enabling the creation of a stronger growth ecosystem for the Indian textile and apparel sector can also have a positive ripple effect on the Viksit Bharat (developed India) goal,” Chandran said.

The textile and apparel sector is India’s second-largest provider of employment and a major contributor to GDP and exports. However, the industry has been under pressure following the imposition of a 50 per cent US tariff on Indian goods from August 27, 2025, which has impacted export competitiveness and raised concerns over job security. The US remains India’s largest export market, accounting for nearly 28 per cent of textile and apparel export revenues, with shipments valued at about $11 billion in FY25.

CITI has proposed a range of measures, including removal of import duty on all varieties of cotton fibre, changes in the cotton MSP formula to align with global benchmarks, and the creation of a Cotton Price Stabilisation Fund. It has also sought globally competitive pricing for man-made fibres.

On competitiveness and sustainability, CITI has recommended a Green Technology Scheme for MSMEs, an alternative to the Technology Upgradation Fund Scheme, promotion of indigenous textile machinery manufacturing, rationalisation of power costs, and the establishment of a National Textile Fund. Trade facilitation measures such as extending RBI trade relief across the value chain, increasing basic customs duty on knitted fabrics, reintroducing MEIS, and extending duty-free imports for made-ups exporters have also been proposed.

“Combined, these measures could increase the resilience of India’s textile and apparel sector and help it become a more powerful force globally,” Chandran said, adding that diversification and upcoming FTAs would take time to offset losses in the US market.