Union Budget 2025: Textile Industry Eyes GST Cuts, Growth Incentives & Sustainability Boost

As Finance Minister Nirmala Sitharaman gears up to present the Union Budget 2025-26 on February 1, the textile and retail sectors are anticipating key reforms to drive growth, streamline compliance, and enhance sustainability. With retail demand fueling the textile industry, leaders are advocating for lower GST rates, tax exemptions, and policies that support domestic production and exports.

Key Expectations from the Budget

Industry leaders stress the need for simplified compliance, MSME support, and incentives for green initiatives such as sustainable packaging and energy-efficient operations. There is also a push for a National Retail Policy to streamline processes, improve logistics in smaller cities, and encourage skill development and digital adoption.

To strengthen India’s global competitiveness in textiles and boost exports, proposals include duty-free imports for essential raw materials, a renewed “Technology Mission on Cotton II” to revive cotton production, and the revival of schemes like the Scheme for Integrated Textile Parks (SITP).

With India targeting a $350 billion textile market by 2030, including $100 billion in exports, the budget could play a crucial role in shaping the future of the industry. Premal Parekh, Managing Director of Parekh Textiles India, shared his views on the growth potential of the cotton waste sector and the importance of government support. He highlighted that promoting research in recycling technologies, facilitating exports of recycled cotton products, and encouraging sustainability initiatives could help expand market opportunities. In his opinion, Budget 2025-26 presents a chance to introduce measures that drive innovation, enhance industry efficiency, and support long-term sustainability.