The Union Budget 2025-26 has put a strong focus on strengthening India’s textile, MSME, and manufacturing sectors through strategic policy interventions. With key measures like the Mission for Cotton Productivity, enhanced credit support for MSMEs, duty restructuring on textiles and leather, and a renewed push for domestic manufacturing, the government aims to drive growth, sustainability, and global competitiveness. The introduction of an Export Promotion Mission and targeted incentives for technical textiles, footwear, and leather further reinforce India’s vision for a self-reliant and future-ready industrial ecosystem. These reforms are expected to boost employment, increase value addition, and position India as a leading global manufacturing hub. Below are the excerpts from Finance Minister Nirmala Sitharaman’s Budget presented in the Parliament today: The Union Budget 2025-26 has announced a Mission for Cotton Productivity to boost yield and sustainability. MSME investment and turnover limits are raised, with enhanced credit access and ₹5 lakh credit cards for micro enterprises. Customs duty on knitted fabrics is revised to 20 per cent or ₹115/kg. Leather sector to benefit from duty exemption on Wet Blue leather and crust leather. Mission for Cotton Productivity For the benefit of lakhs of cotton growing farmers, I am pleased to announce a ‘Mission for Cotton Productivity’. This 5-year mission will facilitate significant improvements in productivity and sustainability of cotton farming, and promote extra-long staple cotton varieties. The best of science & technology support will be provided to farmers. Aligned with our integrated 5F vision for the textile sector, this will help in increasing incomes of the farmers, and ensure a steady supply of quality cotton for rejuvenating India’s traditional textile sector. Revision in classification criteria for MSMEs Currently, over 1 crore registered MSMEs, employing 7.5 crore people, and generating 36 per cent of our manufacturing, have come together to position India as a global manufacturing hub. With their quality products, these MSMEs are responsible for 45 per cent of our exports. To help them achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively. This will give them the confidence to grow and generate employment for our youth. The details are in Annexure D. Annexure D !assets/images/table-image1_20250201t140748.jpg “table-image1_20250201t140748”) Significant enhancement of credit availability with guarantee cover To improve access to credit, the credit guarantee cover will be enhanced:

Credit Cards for Micro Enterprises We will introduce customized Credit Cards with a ₹5 lakh limit for micro enterprises registered on Udyam portal. In the first year, 10 lakh such cards will be issued. Focus Product Scheme for Footwear & Leather Sectors To enhance the productivity, quality and competitiveness of India’s footwear and leather sector, a focus product scheme will be implemented. The scheme will support design capacity, component manufacturing, and machinery required for production of non-leather quality footwear, besides the support for leather footwear and products. The scheme is expected to facilitate employment for 22 lakh persons, generate turnover of ₹4 lakh crore and exports of over ₹1.1 lakh crore. Manufacturing Mission - Furthering “Make in India” Our Government will set up a National Manufacturing Mission covering small, medium and large industries for furthering “Make in India” by providing policy support, execution roadmaps, governance and monitoring framework for central ministries and states. Details are in Annexure E. Annexure E Manufacturing Mission - Furthering “Make in India The Mission’s mandate will include 5 focus areas:

National Centres of Excellence for Skilling Building on the initiative announced in the July 2024 Budget, five National Centres of Excellence for skilling will be set up with global expertise and partnerships to equip our youth with the skills required for “Make for India, Make for the World” manufacturing. The partnerships will cover curriculum design, training of trainers, a skills certification framework, and periodic reviews. Support to Domestic Manufacturing and Value addition Textiles To promote domestic production of technical textile products such as agro-textiles, medical textiles and geo textiles at competitive prices, I propose to add two more types of shuttle-less looms to the list of fully exempted textile machinery.  I also propose to revise the BCD rate on knitted fabrics covered by nine tariff lines from “10% or 20%” to “20% or ₹115 per kg, whichever is higher”. CUSTOMS DUTY RATE CHANGES 1.   Reduction in customs duty to reduce input costs, deepen value addition, promote export competitiveness, correct inverted duty structure, boost domestic manufacturing etc [with effect from 2.2.2025] | S. No. | Commodity | From (per cent) | To (per cent) | |