With the Union Budget 2025 approaching, all eyes are on Finance Minister Nirmala Sitharaman as she prepares to unveil key policy measures on February 1. The fashion, retail, and lifestyle sectors are eager for reforms that can boost demand, promote sustainable manufacturing, and strengthen the industry’s resilience. From tax relief to infrastructure investments, industry leaders are hopeful for strategic initiatives that will drive growth and long-term expansion.
Boosting Consumer Spending & Retail Growth
The retail industry, one of India’s key economic drivers, is looking forward to policies that enhance consumer purchasing power. Satyen Momaya, CEO, Celio India, emphasises the need for tax relief: “The apparel and lifestyle retail segment, impacted by subdued demand over the last 12-18 months and inflation, would greatly benefit from retaining the current GST slabs, especially for products priced at ₹1,000 and above. We also anticipate the swift implementation of a National Retail Policy to streamline operations and foster long-term growth.”
Similarly, Shriti Malhotra, Group CEO, Quest Retail (The Body Shop India), highlights the importance of consumer spending: “Private consumption is the cornerstone of retail growth, and we look forward to government policies that open up the purse strings of consumers through higher tax exemption slabs and reducing GST on essential personal care products. This would provide much-needed relief to the middle class.”
Yashu Jain, Co-Founder & CMO, MattLook Cosmetics also emphasises the need for initiatives that will drive the growth of consumer-driven sectors by saying, “In our wish list, tax rebates and incentives that support disposable income are of tremendous importance, given their direct benefit to lifestyle and beauty products. Investments in infrastructure and logistics will remain paramount in giving access to Tier 2 and Tier 3 markets that have emerged as the industry’s growth point.”
Strengthening Domestic Manufacturing & Sustainability
As the government aims to position India as a global textile and apparel manufacturing hub, industry leaders are urging policies that promote local production and sustainability. Jaiwant Singh Dhingra, Director of Marketing and Business Development, Numero Uno, notes: “We look forward to policies that prioritise lowering GST rates on clothing because this will increase affordability and stimulate demand. We also hope for policies that encourage domestic manufacturing through incentives and subsidies, especially for sustainable production methods.”
Similarly, Vinay Thadani, CEO at Vishal Fabric Limited, stresses the importance of sustainability: “Manufacturers are increasingly adopting eco-friendly practices to address environmental challenges. We are looking forward to making organic fibers, sustainable textiles, and no-chemical dyes a standard offering in the market. The government should set up a PPP model that fosters research and innovation in earth-friendly textile manufacturing.”
Thadani also opines that for FY25-26, India’s textile sector is expected to focus on strengthening its domestic market while also pursuing robust export growth, driven by rising demand in key global markets like the United States, Europe, and the Middle East. This presents a major opportunity for India to solidify its position as a leading textile supplier. To support this growth, the government could consider imposing a reasonable import tax on essential commodities and implementing a Cotton Price Stabilisation Fund Scheme to ensure stability in domestic cotton prices.
Encouraging Digital & E-commerce Expansion
The rapid expansion of digital retail and e-commerce has reshaped the fashion industry. With rising demand in Tier-2 and Tier-3 cities, improving logistics and simplifying online retail regulations remain a priority. Shyam Prasad, Co-founder & CEO, Brand Studio Lifestyle, emphasizes: “We are optimistic about policies that will bolster the fashion and retail industry. Measures to simplify taxation, promote sustainable practices, and enhance digital infrastructure will be crucial for fostering industry growth. We are confident that Union Budget 2025 will prioritise initiatives to empower startups, small businesses, and retailers through targeted incentives and announcements. A lower tax rate for new manufacturing units can open up more opportunities in India’s apparel sector. ”
Likewise, Harsh Somiya, Co-founder, The Bear House, advocates for a stronger e-commerce ecosystem: “Announcements to bolster our digital infrastructure and fortify the e-commerce ecosystem would further empower brands like ours to connect with customers nationwide and beyond.”
Infrastructure & Workforce Development
Beyond taxation and sustainability, industry players are urging the government to invest in infrastructure, supply chains, and skill development. Ramesh Agarwal, Whole Time Director, Rupa & Co, highlights the need for a robust textile workforce. As one of the leading exporters in the sector, Agarwal expects the government to focus on measures that enhance both domestic and global competitiveness. “We hope for the extension of the duty-free import facility for trimmings and enhancements to include made-ups, alleviating cost pressures and aligning us better with international market expectations,” he says adding, “We anticipate government investments in textile workforce skill development initiatives to better satisfy changing consumer demands. Reviving the Scheme for Integrated Textile Parks (SITP) and extending the PLI scheme would help drive manufacturing and exports.”
Similarly, Siddharth Dungarwal, Founder of Snitch, underscores the need for workforce and technology investment: “Policies such as tax rationalization, investment in technology upgrades, and incentives for developing a future-ready workforce can empower businesses like ours to drive innovation, create jobs, and solidify India’s position as a global fashion and retail hub.”
The Road Ahead
The Union Budget 2025 presents a critical opportunity to address the evolving needs of the fashion, retail, and textile industries. By implementing consumer-friendly tax reforms, promoting sustainable production, strengthening digital retail infrastructure, and fostering workforce development, the government can unlock significant growth in these sectors. As businesses eagerly await policy announcements, the industry remains hopeful that the budget will pave the way for a thriving and competitive fashion retail ecosystem.
