The Union Budget 2025 brings a positive outlook for the textile industry, with increased allocations, policy reforms, and support for MSMEs and cotton-based sectors.
Major Announcements:
Increased Budget Allocation: Funding for the textile sector has significantly risen from ₹3,342 crores (FY 2024-25 revised estimates) to ₹5,252 crores, mainly benefiting ATUF & PLI schemes—ensuring faster disbursal of incentive funds to the industry.
5-Year Cotton Mission: A dedicated initiative to boost cotton productivity and production. India currently lacks surplus cotton, with one of the lowest yields (450 kg/hectare vs. the global average of 800+ kg). This mission is set to strengthen the cotton-based textile industry.
Higher Import Duty on Knitted Fabrics: A flat 20% or ₹115/kg (whichever is higher) import duty imposed on all knitted fabric HS codes. This prevents undervalued imports (below ₹575/kg) and benefits the local MMF-based industry.
Technical Textile Boost: Shuttleless looms have been added to the import duty exemption list, encouraging modernization in technical textile machinery.
Consumption-Driven Budget: Increased disposable income for the middle class is expected to drive demand for apparel and home textiles.
Support for MSMEs & Women Entrepreneurs: With textiles being a predominantly MSME-driven sector, various government schemes will directly impact and support small-scale manufacturers, especially women-led enterprises.
Conclusion:
The 2025 budget provides a strong push for the textile industry, ensuring faster fund allocation, boosting domestic production, and curbing undervalued imports. With an increased focus on cotton, technical textiles, and MSME growth, the sector is set for significant progress.
Sanjay K Jain
Chairman, ICC National Textiles Committee
MD, TT Limited
