Ministry of Textiles : The Budget includes a five-year Cotton Mission aimed at enhancing cotton productivity.
Ministry of Textiles : The Union Finance Minister presented the Union Budget for 2025-26 on February 1, 2025. The Budget allocated Rs. 5272 crores (Budget Estimates) to the Ministry of Textiles for the fiscal year 2025-26, reflecting a 19 percent increase compared to the 2024-25 budget estimate of Rs. 4417.03 crore.
To tackle stagnant cotton productivity, the Budget has introduced a five-year Cotton Mission focused on improving cotton yields, particularly for extra-long staple varieties. This mission will provide Science & Technology support to farmers and align with the 5 F principle, aiming to raise farmers’ income and ensure a steady supply of high-quality cotton. By boosting domestic productivity, the initiative will stabilize raw material availability, reduce reliance on imports, and strengthen India’s textile sector’s global competitiveness, particularly in the MSME-driven segment, which accounts for 80% of capacity.
The Budget also seeks to promote the domestic production of technical textiles, such as agro-textiles, medical textiles, and geo-textiles, at competitive prices. Two additional types of shuttle-less looms have been exempted from duties, including Rapier Looms (below 650 meters per minute) and Air jet Looms (below 1000 meters per minute). This will lower the cost of high-quality imported looms and support modernization and capacity building in the weaving sector, while also boosting the Make in India initiative in the technical textile industry.
Additionally, the Basic Custom Duty on knitted fabrics covered by nine tariff lines has been raised from “10% or 20%” to “20% or Rs. 115 per kg, whichever is higher,” which will enhance the competitiveness of Indian knitted fabric manufacturers and reduce cheap imports.
To support handicraft exports, the time frame for exports has been extended from six months to one year, with the option for a further three-month extension. The provision will benefit handicraft exports by expanding the list of items and extending the time period for converting duty-free raw materials used for export production. Nine items, including wool polish materials, sea shells, mother of pearl, and cattle horn, have been added to the list of duty-free inputs.
With 80% of India’s textile sector in MSMEs, the Budget’s focus on exports, enhanced credit, and broader coverage will uplift these small and medium businesses. Other announcements, such as the creation of a National Manufacturing Mission, an Export Promotion Mission, the Bharat Trade Net, a Fund of Funds, measures to support labor-intensive sectors, and revisions in MSME classification, will help create a favorable environment for the textile industry.