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Home News India Budget 2025-26: Will demands of textile industry be addressed?

India Budget 2025-26: Will demands of textile industry be addressed?

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India Budget 2025-26: Will demands of textile industry be addressed?

India’s garment and textile industry is grappling with complex challenges that Finance Minister Nirmala Sitharaman will need to address in her Budget speech on February 1. While Sitharaman will be presenting her eighth consecutive Budget, the million-dollar question remains—will she accept the numerous demands and recommendations from industry leaders? Industry organisations continue to stress the urgency of these challenges, urging the minister to consider their proposals.

Rajeev Gupta, CEO, RSWM Limited expected, “There are several recommendations to improve the industry’s viability and cost competitiveness. To begin with, raw materials prices in India are much higher than global rates since Indian companies deal with QCOs (quality control orders) on MMF (man-made fibres) and yarn. These non-tariff barriers restrict the free flow of raw materials, resulting in a shortage of specialised yarns and fibres, which in turn affects local prices. Therefore, the Centre should liberalise import policies to ensure a more competitive market for raw materials and lower or eliminate customs duty on MMF fibres and essential chemicals that are crucial in raw material production. Since specialised cotton (like organic and contamination-free varieties) is currently imported due to domestic unavailability, import duties to safeguard local farmers are hurting the textile value chains.

Another anomaly is the PLI (production-linked incentive) scheme applying only to synthetic fibre. To support textile and garment firms, the PLI must be applicable to the entire industry, which will incentivise greater investments. The government must reinstate the Technology Upgradation Fund Scheme (TUFS), which offered subsidies for new machinery but was discontinued later, Gupta said.

Industry leaders urge key reforms in import policies, PLI expansion, cotton price stabilisation, and tax rationalisation to boost India's textile sector.
Calls for sustainability, innovation, and ease of doing business dominate expectations.
With rising fitness and retail growth, stakeholders seek policies to enhance domestic production, exports, and consumer accessibility.

“The cotton procurement scheme under MSP (minimum support price) should be replaced with a DBT (direct benefit transfer) programme. This will benefit cotton farmers with more liquidity as they can sell produce without awaiting official procurement. Price volatility also needs to be addressed by creating a Cotton Price Stabilisation Fund, which will ensure the competitive availability of raw materials. An extended credit limit period of eight months (instead of three months) for cotton procurement and an interest subvention scheme could also curb price volatility. The industry finally seeks the deferment of Section 43B(h) of the Income Tax Act, 1961,” Gupta added.

Siddharth Dungarwal, founder of clothing brand Snitch, said, “The apparel and retail industry is a vital contributor to India’s economy, and we are optimistic that the upcoming Union Budget will address some of the critical challenges faced by the sector. We anticipate measures that simplify operations, encourage sustainable manufacturing, and support local brands and retailers in scaling globally. Policies such as tax rationalisation, investment in technology upgrades, and incentives for developing a future-ready workforce can empower businesses like ours to drive innovation, create jobs, enhance customer experiences, and solidify India’s position as a global fashion and retail hub.”

Anand Nichani, Managing Director, Magniflex India, said, “We remain optimistic about the possibility of measures that promote consumer-centric growth and assist sectors devoted to health and wellness. Improving accessibility for customers looking for high-quality solutions requires lowering GST rates and reducing import taxes on certified, premium, and specialised products. Maintaining current customs rates is also essential to prevent additional expenses that can hinder company operations. We can establish a dynamic market environment by stabilising operating costs and boosting economic expansion.”

He said that Budget 2025-26 would be an opportunity to balance between retail expansion spurred by sustainability and innovation and economic prosperity. “We look forward to strengthening India’s standing as a major consumer of high-end products and promote a culture of conscious, high-quality living.”

Vinay Thadani, CEO, Vishal Fabric Limited, said, “India's textile sector is likely to focus primarily on the domestic market. It also looks to achieve strong export growth driven by increasing consumer interest in key markets such as the United States, Europe, and the Middle East. The government should levy a reasonable import tax on certain essential commodities. In addition to which there is a possibility that they work towards devising and implementing a cotton price stabilisation fund scheme to stabilise domestic cotton prices.”

He added that “We are looking to the government to set up PPP model that foster for research and innovation in earth-friendly textile manufacturing.”

Pallav Bihani, CEO & Founder, Boldfit said, “India’s fitness and activewear market is growing at an incredible pace and as wellness becomes a lifestyle priority for millions, this Budget is a chance to give the textile industry a real boost. Activewear has become a core part of fitness culture, but there is still so much untapped potential in terms of domestic manufacturing and sustainable innovation. We need policies that make it easier for Indian brands to create high-performance and eco-friendly fabrics. Reconsidering GST rates on fitness apparel could also go a long way in making high-quality, affordable activewear more accessible, especially in tier 2 and tier 3 cities where fitness adoption is rising rapidly.”

He said that India can position itself as a global hub for activewear exports, with the right support for textile parks and production capabilities. The combination of innovation, sustainability and affordability could truly redefine what the Indian textile and fitness industries can achieve together.

Anand Aiyer, CEO of retail brand Arrow said, “We are optimistic about the government's continued commitment to fostering economic resilience and growth. This is a pivotal moment to prioritise policies that drive innovation, enhance ease of doing business, and strengthen consumer confidence. At Arrow, we remain committed to honouring our legacy while evolving to meet the ever-changing needs of today’s consumers. We eagerly anticipate the opportunities this Budget could create for our business and the industry. We are hopeful the upcoming Budget will introduce initiatives that foster retail growth and simplify business operations.”

Amar Nagaram, Founder and CEO, VIRGIO commented, “We at Virgio are eager to see a focus on innovation, sustainability, and inclusive growth, which are essential for shaping the future of India’s entrepreneurial ecosystem. We remain optimistic that the government will continue fostering an environment where businesses like ours can significantly contribute to the nation’s economic and environmental goals.” For D2C (direct to consumer) start-ups, we hope for initiatives that enhance access to affordable logistics, robust digital infrastructure, and streamlined cross-border trade, enabling international scalability. Expanding tax incentives, simplifying compliance frameworks, and introducing funding schemes to drive innovation in technology and sustainability would be invaluable. Targeted measures to improve credit accessibility, encourage digitization, and reduce the overall cost of operations would be transformative. Encouraging collaborations between MSMEs and larger corporations can further catalyze long-term economic growth,” said Nagaram.

He said that we look forward to policies that incentivize the adoption of green technologies, promote renewable energy investments, and support circular economy initiatives. Such measures will not only help industries align with India’s ambitious climate goals but also ensure a future that is environmentally conscious and economically resilient.

Fibre2Fashion News Desk (KUL)