The Union Budget 2026 has unveiled a comprehensive five-part plan aimed at strengthening India’s textile industry, a sector that employs millions and contributes significantly to exports. The initiative focuses on fibre self-reliance, skilling, infrastructure development, sustainability, and MSME empowerment, with special emphasis on handloom and khadi traditions.
Announcing the plan, the Finance Minister highlighted the importance of building resilience in the textile value chain. The first component, the National Fibre Scheme, seeks to promote self-reliance in natural fibres such as silk, wool, and jute, while also encouraging innovation in man-made and new-age fibres. This measure is expected to reduce import dependency and ensure a steady supply of raw materials for domestic manufacturers.
The second component, Samarth 2.0, is an upgraded skilling and modernisation programme. It will collaborate with industry and academic institutions to train workers in modern machinery, digital tools, and sustainable practices. The government aims to prepare the workforce for global competitiveness, particularly in apparel and technical textiles.
The third component focuses on infrastructure through the establishment of Mega Textile Parks in challenge mode. These parks will be equipped with modern facilities, including logistics, warehousing, and testing centres, to attract investment, boost value addition, and enhance exports. The integrated approach is expected to improve efficiency and reduce production costs.
The fourth component, Khadi and Handloom Empowerment, will be implemented under the Mahatma Gandhi Gram Swaraj initiative. This programme seeks to revive traditional crafts, ensure rural employment, and promote India’s handwoven legacy in both domestic and international markets. The government emphasised that the initiative will strengthen artisans and preserve cultural heritage.
The fifth component introduces a ₹10,000 crore MSME Growth Fund to help small textile businesses scale into champions. Liquidity support will be provided through the Trade Receivables Discounting System (TReDS), enabling MSMEs to access timely finance. This measure is expected to generate employment, enhance competitiveness, and support export growth.
Industry experts have welcomed the five-part plan, noting that it addresses both structural challenges and emerging opportunities. The combination of fibre security, skill development, modern infrastructure, traditional sector revival, and MSME support is expected to position India’s textile industry as globally competitive while ensuring inclusive growth.
With this initiative, the government has signalled its commitment to making textiles a cornerstone of India’s economic development, balancing modernisation with heritage preservation, and empowering millions of workers and entrepreneurs across the country.
