Union Budget 2025-26 Allocates ₹5,272 Crore for Textile Sector, Announces Five-Year Cotton Mission

New Delhi: The Union Budget 2025-26, presented by Union Finance Minister Nirmala Sitharaman on February 1, 2025, has allocated ₹5,272 crore for the Ministry of Textiles, marking a 19% increase over the previous year’s budget of ₹4,417.03 crore.

Five-Year Cotton Mission Launched

To address stagnant cotton productivity, the Budget has announced a five-year Cotton Mission with a special focus on extra-long staple (ELS) varieties. Farmers will receive Science & Technology support, aligning with the 5F vision (Farm to Fiber to Factory to Fashion to Foreign). The mission aims to increase farmers’ incomes, reduce import dependence, and enhance the global competitiveness of India’s textile sector, where 80% of capacity is driven by MSMEs.

Boost for Technical Textiles and Modernization

To promote domestic production of technical textiles, the government has removed duties on two additional types of shuttle-less looms, a move that will modernize the weaving sector and boost “Make in India” initiatives in agro-textiles, medical textiles, and geo-textiles.

• Basic Customs Duty (BCD) on Rapier Looms (below 650 m/min) and Air Jet Looms (below 1000 m/min) reduced from 7.5% to zero.
• BCD on knitted fabrics revised from “10% or 20%” to “20% or ₹115 per kg, whichever is higher,” to curb cheap imports and boost Indian manufacturers.

Export Incentives for Handicrafts

The Budget has extended the time period for handicraft exports from six months to one year, with an additional three-month extension if needed. Additionally, nine more items, including wool polish materials, sea shell, Mother of Pearl (MOP), and cattle horn, have been added to the duty-free import list for handicraft production.

MSME-Focused Initiatives

With 80% of India’s textile sector falling under MSMEs, the Budget’s thrust on exports, enhanced credit access, and labor-intensive sector support will bolster textile MSMEs. Key measures such as the National Manufacturing Mission, Export Promotion Mission, Bharat Trade Net, and Fund of Funds for Startups will create a conducive environment for growth, employment, and entrepreneurship in the textile industry.