By Giriraj Singh
The Viksit Bharat Budget 2026-27 signals confidence, conviction and clear reform orientation at a time of global uncertainty. India today stands as the world’s fourth-largest and the fastest-growing major economy, firmly on track to become the third-largest in the near future. With an economy of $4.5 trillion, GDP growth projected at 7.2%, FDI inflows crossing $750 billion, and capital expenditure rising more than sixfold from Rs 1.9 lakh crore in 2014 to Rs 12.21 lakh crore in 2026, the Budget firmly anchors infrastructure-led growth while reinforcing macroeconomic stability and global confidence.
Beyond headline numbers, it sets out a clear strategic direction focused on inclusive growth and large-scale employment generation through labour-intensive manufacturing, with textiles at its core.
FTAs expand textile market access
Under Prime Minister Narendra Modi’s strategic leadership, the past year has marked a decisive turning point for the textiles sector. Through 18 FTAs, India now has preferential access to textile markets worth nearly $466 billion within a global import market of $800 billion, further boosted by renewed access to the $110-billion US market. The recent US trade deal is expected to lift exports well beyond last year’s levels.
On the domestic front, the removal of quality control orders has eased compliance burdens, while GST reforms have addressed long-standing inverted duty structures. What makes Budget 2026 consequential is continuity and scale. Initiatives such as the cotton productivity mission and broader economic reforms are now being expanded from pilots into platforms. For decades, textiles were viewed largely through a welfare lens. This Budget marks a decisive shift, repositioning textiles as a core industrial strategy for scale, competitiveness and long-term national growth.
The case for such intervention is compelling. India’s textile and apparel sector contributes around 2.3% of GDP, accounts for nearly 12% of industrial production and employs over 52 million people. While India’s share in global textile and apparel exports stands at about 4%, this underlines the sector’s significant growth potential.
The government has set an ambitious objective: scaling the sector to $350 billion by 2030 and expanding exports to $100 billion. Value-chain integration is the first pillar of reform, anchored in meeting the sector’s projected raw material requirement of 23 million MT by 2030 across both natural and man-made fibres. Fibre cost volatility currently accounts for nearly 25-30% of input uncertainty, directly impacting margins, planning and export pricing, particularly for MSMEs.
The Budget addresses this challenge through the national fibre scheme, strengthening domestic availability across cotton, man-made fibres and emerging new-age fibres. By stabilising raw material supply, it improves margin visibility, enhances planning certainty and strengthens export pricing power.
Another constraint has been reliance on legacy production clusters that limits productivity and scale. Modernising these ecosystems is essential. Budget 2026 directly addresses this through the modernisation of 200 industrial clusters nationwide. Employment generation and workforce readiness remain central to the sector’s transformation. Textiles generate nearly three times more jobs per crore of investment than capital-intensive industries. Backed by cluster-led growth, the textile expansion and employment scheme is expected to support 20-30 million additional livelihoods over the next five years.
This momentum is strengthened via SAMARTH 2.0, with an outlay of Rs 2,800 crore between 2026 and 2031 to train 1.5 million industry-ready workers. Tie-ups with NIFT, IITs, IIHTs, ITIs and SVPISTM will further align skilling with production, technology and design needs.
Budget 2026 targets MSME liquidity crunch
Recognising MSMEs as the backbone of the ecosystem, the Budget addresses their most binding constraint—liquidity—through the Rs 10,000-crore SME growth fund, expanded invoice financing via strengthened TReDS platforms and faster government payment cycles.
Importantly, the reform push extends beyond factories to handlooms and handicrafts, employing nearly 6.5 million people across rural India. A strengthened National Handloom and Handicraft Programme, aligned with the Mahatma Gandhi Gram Swaraj Initiative and the ODOP vision, will shift the sector from subsistence support towards skilling, branding and global market access. Sustainability is also embedded as a design principle through the Tex Eco initiative, recognising it as a driver of future competitiveness.
(The author is Union textiles minister)
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.