The ecosystem seeks progress on FTAs with key markets like the European Union (EU), sustained backing for PM Mitra Parks and stronger support for skilling, design education and new-age fashion models
As India prepares for the Union Budget 2026, the apparel, fashion and textile industry is looking beyond incremental support to a more directed push. From measures that put more money in consumers’ hands to a reimagined production-linked incentive (PLI) framework that rewards design, technology and value-added manufacturing, the industry’s asks span the entire ecosystem.
As the country’s textile and apparel (T&A) exports maintained steady growth momentum despite a subdued global trade environment, the ecosystem now seeks progress on free trade agreements (FTAs) with key markets like the European Union (EU), sustained backing for PM Mitra Parks and stronger support for skilling, design education and new-age fashion models.
With domestic consumption showing early signs of recovery and global supply chains realigning, industry leaders see the Budget as a critical lever tosharpen export competitiveness and push the sector decisively up the value chain. Fuelled by rising disposable incomes, urbanisation and the increasing dominance of ecommerce, India’s apparel retail market is expected to touch around Rs 16 lakh crore by the financial year 2030 from Rs 9.30 lakh crore in FY25, as per a report by CareEdge Ratings.
“Measures that support consumer sentiment and disposable incomes can provide a meaningful boost to demand across sectors such as retail and real estate. At the same time, the next phase of growth will be driven by deepening ‘Make in India’ for global markets. With the India EU FTA on the horizon, strengthening export competitiveness in traditional sectors like textiles, alongside a calibrated shift toward high value manufacturing, will be critical,” stated Gautam Singhania, Chairman and Managing Director (CMD), Raymond Group.
Boosting Discretionary Fashion Spend
With apparel and fashion closely tied to discretionary income, industry leaders are pressing for budget measures that revive consumer confidence and purchasing power. Continued personal tax relief, goods and services tax (GST) rationalisation on premium apparel are seen as key triggers to unlock aspirational demand, particularly among gen Z and urban consumers.
“As we approach the Union Budget 2026, the fashion and retail sector is looking for policies that strengthen affordability and remove friction from operations. Further rationalisation of tax structures across apparel categories, building on recent GST reforms, can meaningfully boost consumption during key festive and wedding cycles,” stated Sidhant Keshwani, Founder and Chief Executive Officer (CEO), Libas.
Industry leaders also believe that demand-side measures must be complemented by structural reforms in retail. With the sector contributing significantly to India’s GDP, a unified national retail policy is being pitched as a critical enabler to simplify regulations, ease compliance burdens.
“A unified Retail Policy could act as a key enabler by simplifying regulations, easing compliance, and improving the overall ease of doing business. A unified framework would help both established and emerging brands operate more efficiently and unlock the sector’s true potential in the coming decade,” noted Shivendra Nigam, Chief Financial Officer (CFO), Cantabil.
Moving Up The Ladder
Industry leaders noted that last year’s Budget laid a strong foundation for the textile sector, translating into tangible outcomes in 2025 through improved export performance, GST rationalisation, expansion of the PLI scheme and faster execution of PM Mitra Parks, signalling a shift from policy intent to on-ground scale and impact.
The Rs 5,272 crore allocation supported efforts to boost domestic manufacturing, modernise infrastructure, and strengthen India’s global competitiveness under the Make in India vision, they highlighted. Experts have urged for streamlined export processes through platforms like BharatTradeNet, improved access to export credit and the implementation of progressive labour policies to further consolidate India’s leadership in the global textile value chain.
“We are hopeful, the Union Budget 2026 shall offer an opportunity to build on this momentum of greater importance to modern technology and machinery to drive efficiency and scale. Higher allocations towards R&D and innovation, a stronger focus on the cotton value chain covering farm productivity, quality and sustainability, and controlled garment imports will be crucial,” highlighted Suketu Shah, Chief Executive Officer (CEO), Vishal Fabrics.
Exports Push And Reworking PLI
Export-oriented players are unanimous in their demand for faster progress on Free Trade Agreements with key markets such as the European Union. Addressing duty disadvantages through FTAs, alongside continuity in export-linked incentive schemes and quicker duty remission, is viewed as critical to improving India’s competitiveness.
Textile manufacturers are also seeking deeper intervention across the cotton value chain, from farm productivity and quality to sustainability and traceability. The Confederation of Indian Textile Industry (Citi) has urged the government to permanently abolish the 11 per cent import duty on cotton in the Union Budget 2026, citing rising input costs and concerns over the global competitiveness of Indian textile and apparel manufacturers.
A Citi delegation met Union Agriculture Minister Shivraj Singh Chouhan to seek his intervention for the permanent removal of the import duty on cotton across all varieties. Pearl Global Industries, a diversified apparel exporters and a key manufacturing partner to leading international brands, including Zara, Tommy Hilfiger and Calvin Klein and Walmart, expects policies that strengthen India’s competitiveness in global apparel trade.
“Progress on FTA with key markets such as the UK and the European Union would be a meaningful catalyst, helping to address long-standing duty disadvantages and enabling Indian exporters to compete on a more level playing field. We also see value in policy continuity around export-linked schemes, faster duty remission, and sustained support for integrated textile infrastructure,” emphasised Sanjay Gandhi, Group CFO, Pearl Global Industries.
While the PLI scheme has helped build manufacturing scale, the sector believes it now needs recalibration to reflect the evolving nature of fashion and apparel. Stakeholders are calling for an expanded framework that supports design-led manufacturing, premium fashion, streetwear and technology-driven quality assurance.
“The current PLI scheme has laid important groundwork, but it needs recalibration to unlock its full potential for fashion and luxury segments. The existing structure favours large-scale traditional manufacturing, leaving emerging categories like premium streetwear and authenticated luxury resale largely untapped. An expanded scheme should include incentives for technology-driven quality assurance infrastructure, authentication ecosystems, and supply chain digitisation,” stated Ackshay Jain, Co-founder and CEO, Culture Circle.
Design, Skills And New Fashion Economy
Experts noted that the PLI scheme should be expanded to include design-led manufacturing and skill-based sectors. Today, fashion education institutes play a key role in preparing industry-ready talent, but they are not linked to such policy support. A reworked PLI should encourage collaboration between design institutes and manufacturing units, support innovation labs, student-led production, and technology-driven design, they noted. This will help bridge the gap between education and industry, and create a strong value-added ecosystem rather than only volume-based manufacturing.
“The key demand is stronger support for design education and skill development linked directly to industry needs. Fashion and design institutes should receive policy support for curriculum upgrades, digital tools, sustainability training, and industry partnerships. Budget provisions for internships, apprenticeships, and faculty upskilling will ensure students are job-ready,” pointed out Rinesh Dalal, Director, JD Institute of Fashion Technology.
Jain added that their primary ask is clarity and support for the authenticated resale economy. Currently, there is no policy framework recognising the unique position of authenticated marketplaces that sit between traditional retail and pure ecommerce, he added. “We need clear guidelines on GST applicability for resale transactions, incentives for platforms investing in authentication technology, and recognition that this sector is crucial for combating counterfeits while making premium fashion accessible to millions of aspirational Indians,” he noted.
As India seeks to cement its position as a trusted global sourcing hub while nurturing a rapidly evolving domestic market, budget 2026 is being viewed as a pivotal moment to weave policy continuity, reform and ambition into a framework that can future-proof the apparel, fashion and textile ecosystem for the decade ahead.
