The Union Budget 2025-26 has received strong endorsement
from the Confederation of Indian Textile Industry
(CITI), marking a significant commitment to bolstering
India’s textile and apparel sector.
The budget allocation for textiles has seen a remarkable
increase of 57.7 percent compared to the revised 2024-25
budget, primarily driven by an enhanced allocation of Rs
1,148 crore under the Production Linked Incentive (PLI)
scheme.
CITI Chairman Rakesh Mehra has expressed particular
appreciation for the introduction of the Mission for Cotton
Productivity, addressing a longstanding industry demand.
The initiative aims to enhance cotton farming efficiency
and promote extra-long staple cotton varieties, potentially
reducing India’s dependence on imports for specialized
cotton varieties while improving overall productivity and
sustainability in the sector.
The budget’s technology-focused approach demonstrates a
clear vision for establishing a globally competitive textile
industry.
Several strategic initiatives have been introduced,
including revised tariff structures for knitted fabric
categories, customs duty exemptions for additional
shuttleless looms supporting technical textiles, and the
establishment of an Export Promotion Mission.
These measures align with the sector’s ambitious target of
achieving a USD 350 billion market size by 2030. The
government’s emphasis on MSMEs, which constitute over
45 percent of India’s exports, has been particularly
noteworthy.
While the enhanced credit availability with guaranteed
cover for MSMEs has been welcomed, Mehra noted that the
industry continues to advocate for a hybrid scheme
combining upfront capital subsidy with performance-based
incentives, specifically tailored for MSME growth in the
textile sector.
The implementation of the new tax regime is expected to
have positive implications for the textile and apparel
industry through increased consumer spending power.
According to Mehra, the anticipated rise in disposable
income will stimulate demand across various textile
segments, creating opportunities for both small and large
industry players.
CITI maintains an optimistic outlook regarding importrelated
modifications, particularly concerning extended
timelines for end-use compliance.
The industry body anticipates similar flexibility for
products under Quality Control Orders (QCOs), which
would enhance supply chain efficiency throughout the
textile value chain.
CITI Applauds Textile Sector Allocation & PLI Boost
The 2025-26 Union Budget has been met with cautious
optimism by the Clothing Manufacturers Association
of India (CMAI), particularly in light of the lack
of direct schemes or benefits for the textile industry.
However, CMAI believes there are notable positives that
could stimulate growth for the sector from both the
production and consumption sides.
On the production front, CMAI sees potential in the
measures aimed at bolstering MSMEs, especially within
the micro-sector.
While specifics remain unclear, the increase in upper
limits for MSMEs is expected to provide a significant
boost to smaller players in the textile industry.
The launch of the Cotton Mission is another key
highlight, with the promise of improving cotton supply,
potentially addressing a critical need for the industry.
Additionally, measures designed to enhance the
competitiveness of the export sector, expand domestic
manufacturing capacities, and ease business processes
are anticipated to further strengthen the manufacturing
base.
Another important step for the industry is the reduction
in basic customs duties on certain textile machinery.
CMAI believes this could provide a much-needed push
for modernisation and efficiency in textile
manufacturing.
On the consumption side, the lowering of income tax at
various levels is expected to boost disposable income,
which could drive greater consumption across the sector.
Changes in TDS and TCS limits also stand to enhance
overall consumer spending.
In conclusion, CMAI has given a thumbs-up to the
budget, though with the caveat that the details in the
fine print could have a significant impact.
The association also expressed concern about the
potential for an increase in GST rates for the textile and
apparel sector, which could dampen the positive effects
of the budget.
CMAI Hails Budget Proposals for Boosting