A Budget for a Rising Bharat
The Viksit Bharat Budget 2026-27 signals Confidence, Conviction and a clear Reform orientation at a time of global uncertainty. Bharat today stands as the world’s 4th largest economy and the fastest-growing major economy, firmly on track to become the 3rd largest economy in the near future. With an economy size of $4.5 trillion, GDP growth projected at 7.2 per cent, FDI inflows crossing $750 billion and capital expenditure having increased more than sixfold from ₹1.9 lakh crore in 2014 to ₹12.21 lakh crore in 2026, the Budget firmly anchors infrastructure-led growth. It underscores both macroeconomic stability and sustained global confidence in Bharat’s growth trajectory. Beyond the headline numbers, the Budget sets out a clear strategic direction focused on inclusive growth and large-scale employment generation through labour-intensive manufacturing, with textiles at its core.
From Traditional Strength to Strategic Advantage – Textiles as Viksit Bharat’s Growth Engine
Under the Hon’ble Prime Minister’s strategic leadership, the past year has marked a decisive turning point for the textile sector. Through 18 FTAs, Bharat now has preferential access to textile markets worth about $466 billion within a global import market of $800 billion which is further expanded by renewed access to the $110 billion US market. The recent announcement of the Bharat-US trade deal is expected to close exports at a significantly higher level than last year.
Complementing market access, the removal of QCOs has eased compliance burdens, while GST reforms have addressed long-standing inverted duty structures, moving the sector decisively towards a fibre-neutral framework. These measures laid a strong foundation. What makes Budget 2026 consequential is continuity and scale. Initiatives such as the Cotton Productivity Mission and broader economic reforms are now being converted from pilots into platforms, marking the essence of structural reform. For decades, textiles were seen largely through a welfare lens. This marks a decisive shift, repositioning textiles as a core industrial strategy for scale, competitiveness and long-term national growth.
The case for such an intervention is clear. India’s textile and apparel sector contributes roughly 2.3% of GDP, accounts for about 12% of industrial production and employs over
5.2 crore people, making it a vital pillar for the economy. While India’s share in global textile and apparel exports is around 4%, this highlights the significant scope for expansion. The Government has set out a clear and ambitious medium-term objective. To scale the textile sector to $350 billion by 2030 and expand exports to $100 billion.
Value chain integration is the first pillar of the reform strategy, anchored in the clear objective of meeting the textile sector’s projected raw material requirement of 23 MMT by 2030, spanning both natural and man-made fibres. Fibre cost volatility currently accounts for nearly 25 to 30% of input uncertainty, directly affecting margins, production planning and export pricing, particularly for MSMEs. With a growing population and rising demand for raw material, Budget 2026 addresses this challenge through the National Fibre Scheme. These initiatives strengthen domestic availability across cotton, man made fibres and emerging new age fibres, reinforcing the entire value chain from fibre to finished products. By stabilising raw material supply, the Budget improves margin visibility, enhances planning certainty and strengthens export pricing power for manufacturers, ensuring the sector can scale sustainably to meet future demand.
A central constraint holding back the textile sector has been its reliance on legacy production clusters that limit productivity and scale. Modernising these ecosystems is essential to raise manufacturing efficiency and reduce logistics costs. Budget 2026 directly addresses this need through the modernisation of 200 industrial clusters nationwide. Evidence shows that cluster-based manufacturing can lift labour productivity by 20 to 25% and reduce per unit logistics costs by up to 30%. Investments in Mega Textile Parks, common processing facilities and plug and play ecosystems lower fixed costs at scale, enabling expansion without displacing small producers, a critical imperative for a labour-intensive sector.
Employment generation and workforce readiness lie at the heart of the textile sector’s transformation. Textiles generate nearly 3x more jobs per crore of investment than capital-intensive industries, and successive initiatives have focused on building skills and employability across the value chain. Backed by this cluster-led growth, the Textile Expansion and Employment Scheme is expected to support 2 to 3 crore additional livelihoods over the next five years. This momentum is further strengthened through SAMARTH 2.0, with an outlay of 2,800 crore rupees between 2026 and 2031 to train 15 lakh industry-ready workers. By deepening partnerships with NIFT, IITs, IIHTs, ITIs and SVPISTM, we will further align skilling with real production, technology and design requirements, with the objective of reducing critical skill gaps by up to 50% by 2030.
For this employment and skilling push to translate into sustained growth, enterprises across the textile value chain must have the financial capacity to expand and compete. Recognising MSMEs, the backbone of the textile ecosystem, is a central focus of Budget 2026, which directly addresses their most binding constraint – liquidity. The ₹10,000 crore SME Growth Fund, expanded invoice financing through strengthened TReDS platforms, and faster government payment cycles ease working capital stress, as delayed payments alone lock up nearly 15% of MSME capital annually.
Importantly, this structural shift extends beyond factories to handlooms and handicrafts, which employ nearly 65 lakh people across rural and semi-urban India. A strengthened National Handloom and Handicraft Programme, aligned with the Mahatma Gandhi Gram Swaraj Initiative and the ODOP vision, will move the sector from subsistence support towards skilling, branding and sustained global market access, ensuring that employment growth is inclusive, future-ready and nationally distributed. Budget 2026 also embeds sustainability as a design principle in the textile sector through the Tex Eco initiative, integrating environmentally responsible practices across the value chain and recognising sustainability as a key driver of future export competitiveness.
From Budget Arithmetic to National Direction – The Road to Viksit Bharat
For the first time, textiles are being positioned not as a legacy sector but as a future facing engine of jobs and entrepreneurship. With the capacity to create nearly 5 crore new jobs between 2020 and 2030, the sector lies at the heart of Bharat’s labour intensive growth strategy. The Viksit Bharat Budget creates the foundations for a new generation of textile startups and scalable enterprises. By placing employment, skills and sustainability at the core, the Budget offers a clear, data driven pathway to inclusive growth. It anchors Bharat’s return as a Sone Ki Chidiya in productive jobs and competitive enterprise, shaping Viksit Bharat 2047 and beyond.
Writer: Shri Giriraj Singh, Union Cabinet Minister for Textiles
