Synopsis

The Union Budget 2026-27 places the textile sector at the core of India's growth and employment plans. New schemes will boost natural and man-made fibres. Support for khadi, handloom, and handicrafts will be enhanced. Modernization of textile clusters and skill development are key. Mega textile parks will attract investment in technical textiles.

The Union Budget 2026-27 on Sunday placed the labour-intensive textile sector at the centre of India’s growth and employment strategy, announcing a sweeping set of initiatives aimed at strengthening the entire value chain — from natural fibres and traditional crafts to technical textiles and future-ready skills.

Presenting the Budget, Finance Minister Nirmala Sitharaman announced a National Fibre Scheme to promote self-reliance across natural fibres, man-made fibres and new-age textile materials, signalling a move to build depth across the entire value chain rather than focusing on select segments.

To address employment and competitiveness, the government will roll out textile-specific employment schemes with an emphasis on technology upgradation and targeted support for small and medium enterprises, Sitharaman said.

At the heart of the push is the Mahatma Gandhi Gram Swaraj Initiative, which will strengthen khadi, handloom and handicrafts. The programme will support global market linkages and branding of Indian textile products, while streamlining training, skilling and quality standards to help artisans and weavers compete more effectively in domestic and international markets.

To boost employment, the Budget proposed a Textile Expansion and Employment Scheme, under which traditional textile clusters will be modernised through capital support for machinery, technology upgradation, and the creation of common testing and certification facilities aimed at raising productivity and job creation.

The Budget also proposes to integrate handloom and handicraft programmes under a national framework to provide targeted support to traditional artisans, improve market access and ensure better alignment with contemporary demand.

Underscoring the push for sustainability, Sitharaman announced eco-initiatives aimed at encouraging environmentally responsible production practices across the textile ecosystem.

As part of its skilling push, the government will launch Samarth 2.0, an upgraded version of the existing scheme, to modernise the textile skilling ecosystem and align training with evolving industry needs.

The finance minister also said that mega textile parks will be taken up in challenge mode, with a sharper focus on attracting investments in technical textiles, a segment seen as critical for exports and industrial diversification.

The integrated package reflects the government’s attempt to position textiles as a growth and employment engine while balancing modern manufacturing, sustainability and traditional strengths.