With an aim to boost the textiles and garment export sectors, the upcoming Union Budget will increase its fund allocation for the sectors by 15 per cent

Last year, the government had allocated Rs 4,417 crore for the sector. This year, it aims to reduce taxes on different types of including polyester and viscose special fibers. It also plans to introduce a new Production-Linked Incentive (PLI) scheme for the textile sector. Emulating the current PLI initiatives, this new scheme will offer tax incentives and concessions to encourage local manufacturing.

In last year’s budget presented in July 2024, the Finance Ministry had new initiatives to enhance export competitiveness in the leather and textile sectors. The ministry had proposed reducing the basic customs duty on real down filling materials from duck or goose.

The government also added more items to the list of exempted goods used in manufacturing leather and textile garments, footwear, and other leather items for export. Additionally, it reduced the customs duty on methylene diphenyl diisocyanate (MDI), a key material for spandex yarn production, from 7.5 per cent to 5 per cent.

Further, export duties on raw hides, skins, and leather were also simplified and streamlined.

A corner of the Indian economy, the textile and garment sector employs around 45 million people. From April to November 2024, exports from the sector rose by 7 per cent Y-o-Y to over $23 billion.