India’s Union Budget 2026–27 signals a decisive pivot in policy approach for textiles, apparel, fashion and allied lifestyle sectors—shifting focus from short-term consumption stimulus to long-term supply-side capability building. With integrated textile programmes, MSME-focused reforms, skilling initiatives and export enablers at the core, the Budget aims to strengthen domestic manufacturing, employment generation and global competitiveness, even as the sector navigates challenges from import pressures and evolving FTAs.
From Incremental Reform to Systemic Change
Industry leaders across fashion, retail and textiles have largely welcomed the Budget, describing it as a structural reset rather than incremental reform.
Prashant Aluru, CEO & Co-Founder, TMRW House of Brands, described the Budget as laying down the “operating system for India’s next growth cycle,” particularly for consumer brands across fashion, textiles and lifestyle. He highlighted the Integrated Programme for Textiles—spanning the National Fibre Scheme, cluster modernisation, Tex-Eco and Mega Textile Parks—as a clear signal that textiles are now being treated as a strategic industry rather than a legacy sector. “For brands, the takeaway is straightforward: the policy backbone is being built. The responsibility now shifts to industry to scale ambition, innovation, and execution, faster than the usual pace!” he emphasised.
Echoing this view, Abhinav Kumar, Co-Founder, Brand Concepts Limited, said the Budget provides a forward-looking roadmap that reinforces domestic manufacturing, innovation and supply-chain resilience. He noted that initiatives such as mega textile parks, MSME enablement and logistics improvements will help brands scale efficiently, particularly as they expand into Tier II and Tier III markets.
Manufacturing, Fibre Security and MSME Enablement in Focus
From the manufacturing side, the emphasis on fibre security, cluster modernisation and MSME financing stood out.
Suketu Shah, CEO, Vishal Fabrics Ltd, called the Budget “well-balanced and future-oriented,” pointing to fibre security, technology upgradation and cluster development as critical enablers for export competitiveness and capacity planning.
“The focus on fibre security in natural, man-made, and new fibres tackles the existing challenge in the industry regarding input volatility and quality, which is essential for capacity planning and export competitiveness. On the other hand, the call for the modernization of the traditional textile sector through technology upgradation, joint testing facilities, and certification assistance will ensure that the gap between the country’s manufacturing capabilities and new global standards is bridged.”
He added that Samarth 2.0 and the Rs 10,000 crore SME Growth Fund are likely to have a meaningful impact on employment generation and MSME-led growth.
The Clothing Manufacturers Association of India (CMAI) also welcomed the comprehensive approach, noting that the Budget addresses the textile economy end-to-end—from fibre and farming to manufacturing, skilling, sustainability and exports. CMAI highlighted the National Fibre Mission as a critical step towards self-reliance across natural, man-made and special-use fibres, reducing import dependency and improving raw material security. The Mission for Cotton Productivity, with its focus on yields, extra-long staple varieties and technology-led farmer support, was seen as vital for improving farm incomes and ensuring consistent, high-quality cotton supply for the industry.
However, CMAI flagged that while the direction is positive, the current allocation of Rs 1,500 crore for the Integrated Textile Programme in FY26–27 may need to be enhanced in the coming years to deliver meaningful sector-wide transformation.
Skilling, Sustainability and Cluster-Led Growth
A recurring theme across industry responses is the renewed focus on skilling, sustainability and cluster-based development.
Women-focused and contemporary fashion brands see this as an opportunity for more inclusive growth. Akhil Jain, CEO & MD, Madame, highlighted the emphasis on modernisation, skilling and sustainability. He said, “The renewed push for handloom, handicrafts, and rural employment has the potential to increase women’s economic participation across the value chain. For women-focused brands like Madame, this enables deeper local sourcing, sharper innovation, and more inclusive growth aligned with evolving consumer expectations.”
Similarly, Sidhant Keshwani, Founder & CEO, Libas, said that by focusing on Mega Textile Parks and the National Fibre Scheme, the government is building the infrastructure needed to turn India into a global fashion leader. “The new Text-ECON initiative and modernization schemes directly address the industry’s need for better technology and global competitiveness. Furthermore, programs like SAMARTH 2.0 and the Mahatma Gandhi Gram Swaraj Initiative will empower our artisans, linking traditional crafts with global markets,” he added.
CMAI echoed these views, stating that Samarth 2.0, National Centres of Excellence and allied skilling initiatives will help equip the workforce with contemporary manufacturing and design skills, accelerate adoption of Industry 4.0 technologies and support the shift towards higher-value production.
The Textile Eco Initiative and mission-mode development of Mega Textile Parks were also highlighted as critical for improving compliance, traceability and sustainability, while attracting investments into integrated manufacturing and export hubs.
Retail and Demand: A Gradual Play
Retail bodies have taken a more measured view on near-term demand impact.
Kumar Rajagopalan, CEO, Retailers Association of India (RAI), observed that the Budget is not designed to stimulate short-term consumption but instead focuses on improving the operating environment through infrastructure, skilling, MSME support and regional development. He added that the impact on retail would be gradual and uneven, driven largely by supply-chain efficiency and workforce readiness.
Luxury, D2C and Export Ambitions
Luxury and premium brands see structural tailwinds emerging, especially when viewed alongside trade agreements.
Shalini Singh Rathore, Founder & Chief Creative Officer, TZÁR, described the Budget—alongside the India-EU FTA—as a landmark moment for Indian luxury. She noted that measures such as cluster modernisation, fibre security and duty rationalisation position Indian labels to compete on capability rather than cost, particularly in global markets.
D2C and new-age brands welcomed export-focused measures but highlighted areas for further reform. Tejasvi Madan, Founder, Beyond Bound, called for dedicated export readiness programmes for D2C fashion brands, faster GST refunds, simplified forex compliance and special credit lines for women-led apparel startups to accelerate global expansion.
Siddharth Dungarwal, Founder, Snitch, added that export enablement measures—including duty rationalisation and removal of the courier export value cap—create a strong foundation for D2C brands to scale globally while building value-added manufacturing capabilities in India.
Industry, Consulting and Allied Sectors Respond
Consulting and industry leaders underscored the long-term implications of the policy framework.
Kanishk Maheshwari, Co-Founder & MD, Primus Partners, said the strong focus on infrastructure modernisation and skill upgradation would boost foreign investment and integrate Indian textile units more deeply into global value chains. Sanjay Jain, Group CEO, PDS Ltd, highlighted SAMARTH 2.0, Text-ECON and PM MITRA parks as critical levers to modernise skilling, improve productivity and strengthen India’s export competitiveness.
Beyond textiles, allied sectors such as jewellery also welcomed policy stability. Neil Sonawala, Managing Director, Zen Diamond India, said stable customs duties and a focus on disposable income provide predictability for pricing, inventory planning and long-term growth in discretionary categories.
Summing up the broader shift, Amar Nagaram, Co-Founder, VIRGIO, noted that the Budget reflects a move towards value- and innovation-led growth, driven by the convergence of design, technology and sustainability.
Rajeev Gupta, Joint Managing Director, RSWM Limited, emphasised that the Integrated Programme for Textiles represents a holistic approach to strengthening the entire value chain—from fibre security and MSME modernisation to skilling, sustainability and inclusive rural growth.
Long-Term Confidence, Execution Now Key
Overall, Union Budget 2026–27 is being widely viewed as a confidence booster for India’s fashion, textile and retail ecosystem. With its emphasis on fibre security, MSME scale-up, skilling, sustainability and export competitiveness, the Budget prioritises long-term resilience and global integration over immediate gains. Industry consensus now points to one critical next step: swift, transparent and effective implementation.
