The Union Budget 2025-26 was presented by the Union Finance Minister on February 1, 2025. The Budget announced an outlay of Rs. 5272 crores (Budget Estimates) for the Ministry of Textiles for 2025-26. This is an increase of 19 percent over budget estimates of 2024-25 (Rs. 4417.03 crore).
To address the challenges of stagnant cotton productivity, Union Budget 2025-26 has announced a five year Cotton Mission to increase cotton productivity especially extra long staple varieties. Science & Technology support will be provided to farmers under this Mission. The Mission is in keeping with the 5 F principle and will increase income of the farmers and augment a steady supply of quality cotton. By boosting domestic productivity, this initiative will stabilise raw material availability, reduce import dependence and enhance the global competitiveness of India’s textile sector, where 80% of capacity is driven by MSMEs.
To promote domestic production of technical textile products such as agro-textiles, medical textiles and geo textiles at competitive prices, two more types of shuttle-less looms added to the list of fully exempted textile machinery. Duty on Shuttle less loom Rapier Looms (below 650 meters per minute) and Shuttle less loom Air jet Looms (below 1000 meters per minute) for use in textile industry has been made nil from the existing 7.5%. This provision will reduce the cost of high-quality imported looms thus facilitating modernisation and capacity enhancement initiatives in the weaving sector. This will also will boost Make in India in technical textile sector viz. agro textiles, medical textiles, and geo-textiles.
Basic Custom Duty rate on knitted fabrics covered by nine tariff lines increased from “10% or 20%” to “20% or Rs.115 per kg, whichever is higher” This will improve competitiveness of Indian knitted fabric manufacturers and curb cheap imports.
To facilitate exports of handicrafts, time period for export extended from six months to one year, further extendable by another three months, if required Handicraft exports will benefit from this provision extending the list of items and the time period for conversion of duty free raw material imports meant for export production. Nine items including wool polish materials, Sea shell, Mother of Pearl (MOP), Cattle horn etc. added to the list of duty-free inputs.
80% of India’s textile sector is in MSME. Budget thrust on export, enhanced credit and coverage will uplift textile MSMEs. Other announcements like creation of National Manufacturing Mission, Export Promotion Mission, creating the Bharat Trade Net, Fund of Funds, Measures for Labour-Intensive Sectors to promote employment and entrepreneurship opportunities, revision in classification criteria for MSMEs and others will create conducive environment for the textile sector.
