New Delhi [India], February 4 : The Union Budget has unveiled a five-year Cotton Mission aimed to increase cotton productivity, particularly among extra-long staple varieties, leveraging Science and Technology support for farmers, ensuring that the cotton-growing community benefits from modern techniques to boost yield.
According to the Ministry of Textiles, this initiative aligns with the 5 F principle--Farm to Fibre, Fibre to Factory, Factory to Fashion, Fashion to Foreign--and will help increase the income of farmers, ensure a steady supply of quality cotton, and ultimately contribute to the global competitiveness of India's textile sector.
This mission is expected to significantly reduce India's dependence on cotton imports, stabilise raw material availability, and position India's textile industry for sustained growth. With 80 per cent of India's textile capacity driven by MSMEs, the increase in domestic cotton production will prove vital in enhancing the competitiveness of small and medium enterprises in the industry.
The Union Finance Minister presented the Union Budget 2025-26 on February 1, with a major focus on bolstering India's textile sector, which plays a pivotal role in the nation's economy.
The Union Budget presented on February 1 announced a significant increase in the allocation for the Ministry of Textiles, with an outlay of Rs. 5272 crore for the year 2025-26.
This represents a 19 per cent increase over the previous fiscal year's allocation of Rs. 4417.03 crore, demonstrating the government's commitment to nurturing and advancing the sector.
The Budget also introduces measures to promote the domestic production of technical textile products such as agro-textiles, medical textiles, and geo-textiles.
To facilitate this, two additional types of shuttle-less looms have been added to the list of fully exempted textile machinery. Specifically, the duty on Shuttle-less Loom Rapier Looms (below 650 meters per minute) and Shuttle-less Loom Air jet Looms (below 1000 meters per minute) has been reduced to nil from the previous 7.5 per cent.
This provision is expected to reduce the cost of high-quality imported looms, thereby facilitating modernisation and capacity enhancement initiatives in the weaving sector. This, in turn, will further boost the 'Make in India' initiative within the technical textile segment.
Additionally, the Budget has increased the Basic Customs Duty rate on knitted fabrics covered by nine tariff lines from "10 per cent or 20 per cent" to "20 per cent or Rs. 115 per kg, whichever is higher." This revision is aimed at improving the competitiveness of Indian knitted fabric manufacturers and curbing cheap imports that have often threatened domestic production.
The Budget also seeks to enhance the growth prospects for India's handicraft exports by extending the export time period from six months to one year, with a provision for an additional three-month extension, if required.
This move is expected to benefit a wide range of items, as the government has also added nine items, including wool polish materials, sea shells, Mother of Pearl (MOP), and cattle horn, to the list of duty-free inputs for export production.
India's textile sector, with 80 per cent of its capacity in MSMEs, is set to benefit from several other provisions in the Budget. These include the creation of the National Manufacturing Mission, Export Promotion Mission, and Bharat Trade Net, all of which will facilitate export growth.
The government's emphasis on enhancing credit and coverage for MSMEs will provide significant support, helping to uplift small enterprises in the sector.
Furthermore, initiatives like the Fund of Funds and measures to promote employment and entrepreneurship opportunities in labour-intensive sectors are expected to create a conducive environment for the textile sector's growth.
The revision in the classification criteria for MSMEs will also benefit a larger number of small enterprises, enabling them to access more resources and opportunities.