National Fibre Scheme, cluster modernisation, craft revival, sustainability drive and Samarth 2.0 anchor government’s jobs-focused textile strategy
The Union Budget 2026-27, presented on Sunday, has placed India’s labour-intensive textile sector at the centre of the country’s growth and employment agenda, unveiling a comprehensive set of measures to strengthen the entire value chain—from natural fibres and traditional crafts to technical textiles and future-ready skills.
Presenting the Budget, Union Finance Minister Nirmala Sitharaman announced a National Fibre Scheme to promote self-reliance in natural fibres, man-made fibres and emerging textile materials. The initiative signals a broader push to deepen the entire textile value chain rather than focus on select segments.
The minister also outlined a comprehensive integrated programme for the textile sector built around five key components aimed at boosting production, skilling and global competitiveness.
She said, “I propose an integrated programme with five sub-parts. One, the National Fibre Scheme for self-reliance in natural fibres such as silk, wool and jute, man-made fibres, and new-age fibres. Two, the Textile Expansion and Employment Scheme to modernise traditional clusters with capital support for machinery, technology upgradation, and common testing and certification centres. Three, the National Handloom and Handicraft Programme to integrate and strengthen existing schemes and ensure targeted support for weavers and artisans.”
To drive job creation and improve competitiveness, the government will roll out textile-specific employment schemes with a focus on technology upgradation and targeted support for small and medium enterprises, Sitharaman said.
Gram Swaraj Initiative
A major highlight of the Budget is the Mahatma Gandhi Gram Swaraj initiative, which puts special emphasis on strengthening khadi, handloom and handicrafts. Announcing the initiative, the minister said, “I propose to launch the Mahatma Gandhi Gram Swaraj initiative to strengthen Khadi and handloom.” 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.
Further detailing the initiative, she added, “I also propose to launch the Mahatma Gandhi Gram Swaraj initiative to strengthen handloom and handicrafts. This will help in global market linkages and branding. It will streamline and support training, skilling, and quality processes in production. These measures will benefit our weavers, village industries, the One District, One Product (ODOP) initiative, and our rural youth.”
To modernise production hubs and boost employment, the Budget proposed a Textile Expansion and Employment Scheme, under which traditional textile clusters will be upgraded through capital support for modern machinery, technology improvements and the creation of common testing and certification facilities aimed at enhancing productivity and job opportunities.
Handloom and handicraft schemes will also be consolidated under a National Handloom and Handicraft Programme to ensure better coordination, targeted assistance for artisans and improved alignment with contemporary market demand.
Underscoring sustainability and export competitiveness, Sitharaman announced the Text-ECON initiative to promote globally competitive and environmentally responsible textiles and apparel manufacturing.
Modern Clusters, Green Production And Future Skills
On the skilling front, the government will introduce SAMARTH 2.0, an upgraded version of the existing programme. The minister said it would modernise the textile skilling ecosystem through stronger collaboration with industry and academic institutions.
The Finance Minister also confirmed that mega textile parks will be developed through a competitive “challenge mode” approach. She said, “I propose to set up mega textile parks in challenge mode.” These parks are expected to attract investments, particularly in technical textiles, and drive value addition in a segment seen as critical for exports and industrial diversification.
Together, the measures form an integrated package aimed at positioning textiles as a key driver of economic growth and employment, while balancing modern manufacturing, sustainability and India’s rich legacy of traditional textile craftsmanship.
