India's Gujarat state raises textile outlay by 38% in Budget for FY27
India’s western state of Gujarat has announced a sharp increase in financial outlay for the textile sector, with allocation under the Development of Textile Industry scheme rising to ₹2,755 crore (~$302.71 million). The higher outlay signals a strong push to sustain Gujarat’s leadership in textile manufacturing while strengthening export competitiveness and MSME participation.
State Finance Minister Kanubhai Desai presented the State Budget for fiscal 2026–27 in the Legislative Assembly on Wednesday in Gandhinagar. The allocation under the Development of Textile Industry scheme has increased from ₹2,000 crore in 2025–26 and ₹2,036.47 crore in 2024–25, reflecting a significant year-on-year expansion in subsidy-driven industrial support.
The scheme is expected to facilitate capacity expansion, technology upgradation and investment promotion across the textile value chain. Alongside industrial support, the Budget continues provisions for cottage, handloom and small-scale textile ecosystems through grants, subsidies and institutional assistance, covering cooperative manufacturing, training and research support, and export facilitation for smaller producers.
Artisan-focused measures also feature prominently. Financial assistance to the Gujarat State Handicraft Development Corporation has been increased to ₹48.05 crore ($5.27 million) for 2026–27 from ₹41.86 crore in the previous year, aimed at strengthening market access and institutional support. A further ₹23 crore ($2.53 million) has been earmarked for design competitions, exhibitions and promotional initiatives to enhance product innovation and visibility in the handicraft segment.
To support export-oriented industries, including textiles and apparel, the Budget proposes establishing the Gujarat State Export Promotion Council with an allocation of ₹5.90 crore (~$6.48 million) to facilitate export development and market expansion. In addition, provisions enabling handloom and handicraft stakeholders to leverage e-commerce platforms indicate an emerging focus on digital market access and diversification.
Overall, the Budget underscores a dual strategy of scaling industrial textile investment through a higher core outlay while sustaining traditional and MSME segments through targeted support, export facilitation and digital market initiatives.
Ashish Gujarati former President of the Southern Gujarat Chamber of Commerce and Industry (SGCCI) commented on the budget, “The increase in textile allocation from ₹2,000 crore to ₹2,755 crore reflects the State’s continued commitment to implementing the Gujarat Textile Policy and supporting sector growth.” He added that the proposed formation of the Gujarat Export Promotion Council is a positive step that is expected to facilitate higher exports of MSME products by strengthening market access and institutional support.
read more:- Central and state budgets to boost MSMEs
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