India’s Finance Minister, Nirmala Sitharaman, will introduce the Union Budget 2025–26 on 1 February in Parliament in New Delhi. The retail sector, which is a core driver of the Indian textile industry, expects that the government will take steps to boost disposable income in consumers’ pockets by providing more tax exemptions and reliefs. The industry also expects simplified compliance processes, incentives for sustainable and digital initiatives, and enhanced support for MSMEs and startups.
Deepak Bansal, Whole-time Director, Cantabil Retail India, commented, “The retail fashion industry eagerly anticipates the 2025 Union Budget, with key expectations including simplified compliance processes and incentives for sustainable and digital initiatives. The sector seeks enhanced support for MSMEs and startups to boost domestic production and exports. As consumer sentiment remains pivotal, tax reliefs to increase disposable income would drive demand. Overall, a progressive budget addressing these priorities can empower the industry and contribute significantly to economic growth.”
Key expectations include support for MSMEs, domestic manufacturing, infrastructure, logistics, and skill development.
Industry leaders stress aligning policies to drive growth and innovation.
Shriti Malhotra, Group CEO, Quest Retail, stated, “We look forward to policies that will uplift the retail sector, especially by fostering youth employment, sustainable practices, and inclusivity in hiring. Private consumption is the cornerstone of retail growth, and we look forward to government policies that open up the purse strings of consumers. Higher tax exemption slabs and reducing GST on essential personal care products could provide much-needed relief to the middle class. This would not only boost disposable incomes but also enhance consumers’ ability to purchase high-quality, ethical products that align with their growing preference for quality and sustainable choices.”
He said that the government should also prioritise incentives for green initiatives, such as providing incentives to retailers for adopting sustainable packaging and energy-efficient retail operations. Furthermore, expediting the implementation of a National Retail Policy is critical. Simplifying compliance processes, improving logistics in Tier 2 and Tier 3 cities, driving ease of doing business, and providing targeted incentives for small retailers can create a more level playing field. Investments in retail skill development programmes, especially in adopting digital marketing and technology, are also essential to building a future-ready retail sector capable of meeting evolving consumer expectations. A progressive budget that addresses these priorities can stimulate private consumption, strengthen retail, and create a resilient ecosystem that balances economic growth with environmental and social responsibility.
Ramesh Agarwal, Whole-time Director, Rupa & Co., said, “We eagerly anticipate the upcoming Union Budget, recognising the crucial role the textile industry plays in driving India’s economic growth. As one of the leading exporters in the sector, we expect the government to focus on measures that enhance both domestic and global competitiveness. We hope for the extension of the duty-free import facility for trimmings and enhancements to include made-ups, alleviating cost pressures and aligning us better with international market expectations.”
He added that the Government of India has set an ambitious target of achieving a $350 billion textile market size, including exports of $100 billion, by 2030. To reach this target, the country will need a boost in cotton and other types of fibres. Over the past decade, cotton production has declined by 18 per cent. In this context, we strongly support the launch of Technology Mission on Cotton II (TMC II), which will revitalise cotton production through investments in advanced seed technology and clean cotton initiatives. Additionally, we anticipate a phased implementation of Section 43B(h) of the Income Tax Act, which could disrupt the textile value chain due to rigid timelines. We also hope the government revives the Scheme for Integrated Textile Parks (SITP) and extends the PLI scheme to drive manufacturing and exports. We are confident these measures will support sustained growth and strengthen India’s global competitiveness in textiles.
According to Jaiwant Singh Dhingra, Director of Marketing and Business Development, Numero Uno, "For the textile and retail industries, Budget 2025 offers a crucial opportunity to encourage expansion and innovation. As a leading denim brand in India, we look forward to policies that prioritise lowering GST rates on clothing, as this will increase affordability and stimulate demand from consumers. We also hope for the government to implement policies that encourage domestic manufacturing through incentives and subsidies, especially for sustainable production methods. This would not only strengthen India's standing as a world leader in the textile sector but also increase exports.”
“Building infrastructure, simplifying e-commerce laws, and investing more in textile workforce skill development initiatives would enable firms to better satisfy changing consumer demands. We anticipate a budget that supports the goal of India becoming a centre for premium, eco-friendly fashion,” says Dhingra.
Fibre2Fashion News Desk (KUL)