Budget announces Rs. 5272 crores for the Ministry of Textiles
The Union Budget for 2025-26 was unveiled by the Union Finance Minister on February 1, 2025. This budget is significant for the textile industry, which plays a crucial role in India’s economy. The government has allocated Rs. 5,272 crores to the Ministry of Textiles, marking a 19% increase from the previous year’s budget of Rs. 4,417.03 crores. This increase reflects the government’s commitment to enhancing the textile sector, which is vital for employment and economic growth.
Cotton Mission: Enhancing Productivity
One of the key initiatives in the Union Budget is the introduction of a five-year Cotton Mission. This mission aims to tackle the challenges of stagnant cotton productivity in India. The focus will be on increasing the yield of extra-long staple cotton varieties. The government plans to provide scientific and technological support to farmers under this mission.
The Cotton Mission aligns with the “5 F” principle, which emphasizes farm-to-fiber-to-fabric-to-fashion-to foreign. By improving cotton productivity, the initiative aims to increase farmers’ incomes and ensure a steady supply of quality cotton. This is crucial for stabilizing raw material availability in the textile sector. Currently, 80% of India’s textile capacity is driven by Micro, Small, and Medium Enterprises (MSMEs). By boosting domestic cotton production, the mission will reduce import dependence and enhance India’s global competitiveness in textiles.
Promoting Technical Textiles
The budget also emphasizes the promotion of domestic production of technical textiles. These include agro-textiles, medical textiles, and geo-textiles. To facilitate this, the government has introduced significant changes to the import duties on shuttle-less looms. The duty on shuttle-less loom Rapier Looms and Air Jet Looms has been reduced to nil from the previous rate of 7.5%.
This reduction will lower the cost of high-quality imported looms, making it easier for Indian manufacturers to modernize and enhance their weaving capacities. The move is expected to boost the “Make in India” initiative, particularly in the technical textile sector. By encouraging local production, the government aims to make Indian textiles more competitive in both domestic and international markets.
Support for Handicraft Exports
Another important aspect of the Union Budget is the support for handicraft exports. The government has extended the time period for exporting handicrafts from six months to one year. This extension can be further increased by three months if necessary. This provision will benefit handicraft exporters by allowing them more time to convert duty-free raw material imports into finished products for export.
Additionally, nine new items have been added to the list of duty-free inputs for handicraft production. These include wool polish materials, sea shells, mother of pearl, and cattle horn. This move is expected to enhance the competitiveness of Indian handicrafts in the global market. With 80% of India’s textile sector comprising MSMEs, the budget’s focus on exports and enhanced credit will uplift these small businesses.
Creating a Conducive Environment for MSMEs
The Union Budget 2025-26 also includes several measures aimed at creating a favorable environment for MSMEs in the textile sector. The government has announced the creation of a National Manufacturing Mission and an Export Promotion Mission. These initiatives will focus on boosting manufacturing and exports in the textile industry.
Furthermore, the introduction of the Bharat Trade Net and a Fund of Funds will provide additional support to MSMEs. The budget also includes measures to promote employment and entrepreneurship opportunities in labor-intensive sectors. By revising the classification criteria for MSMEs, the government aims to create a more conducive environment for growth and innovation in the textile sector.
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