India Budget 2025-26: Will demands of textile industry be addressed?
2025-01-30 16:19:03
Will the textile industry's expectations be met in the 2025–2026 Indian budget?
India's apparel and textile industry is grappling with complex challenges that Finance Minister Nirmala Sitharaman will have to address in her budget speech on February 1. While Sitharaman will present her eighth consecutive budget, a big question is whether she will accept the many demands and recommendations of industry leaders? Industry bodies are urging the minister to consider their proposals, stressing the urgency of these challenges.
Rajiv Gupta, CEO, RSWM Ltd, hoped, “There are several recommendations to improve the viability and cost competitiveness of the industry. First, raw material prices in India are much higher than global rates as Indian companies deal with QCOs (quality control orders) on MMF (man-made fibres) and yarns. These non-tariff barriers restrict the free flow of raw materials, resulting in shortages of specialty yarns and fibres, which in turn impacts local prices. Therefore, the Centre should liberalise import policies to ensure a more competitive market for raw materials and reduce or eliminate customs duties on MMF fibres and chemicals critical in the production of raw materials. Since specialty cotton (such as organic and contamination-free varieties) is imported due to domestic unavailability, import duties imposed to protect local farmers are hurting textile value chains. “The cotton procurement scheme under MSP (minimum support price) should be replaced with a DBT (direct benefit transfer) programme,” Gupta added. This will provide more liquidity to cotton farmers as they can sell the produce without waiting for official procurement. Price volatility also needs to be addressed by creating a Cotton Price Stabilisation Fund, which will ensure competitive availability of raw material. An extended loan limitation period of eight months (instead of three months) for cotton procurement and an interest waiver scheme can also prevent price volatility. The industry ultimately seeks the suspension of Section 43B(h) of the Income Tax Act, 1961.
" Siddharth Dungarwal, founder of clothing brand Snitch, said, "The apparel and retail industry is a key contributor to India's economy, and we are optimistic that the upcoming Union Budget will address some of the critical challenges faced by the sector. We expect measures that simplify operations, encourage sustainable manufacturing, and help local brands and retailers expand globally. Policies such as tax rationalisation, investments in technology upgradation and incentives to develop a future-ready workforce can enable businesses like ours to drive innovation, create jobs, improve customer experience and strengthen India's position as a global fashion and retail hub.
Pallav Bihani, CEO and Founder, Boldfit, said, “India's fitness and activewear market is growing at an incredible pace and as health becomes a lifestyle priority for millions, this budget is an opportunity to give the textile industry a real boost. Activewear has become a core part of the fitness culture, but there is still a lot of untapped potential in terms of domestic manufacturing and sustainable innovation.
The combination of innovation, sustainability and affordability can truly define what the Indian textile and fitness industry can achieve together. Anand Iyer, CEO of retail brand Arrow, said, “We are optimistic about the government's continued commitment to foster economic resilience and growth. This is a critical moment to prioritise policies that foster innovation, enhance ease of doing business and strengthen consumer confidence. At Arrow, we are committed to honouring our legacy while evolving to meet the ever-changing needs of today's consumers. We eagerly look forward to the opportunities this budget will create for our business and the industry. We hope the upcoming budget will bring initiatives that will drive retail growth and simplify business operations."
