Indian Textile Industry Calls for Budget Reforms to Boost Competitiveness

Ahead of the Union Budget 2025-26, the Indian textile industry is demanding reforms including the removal of import duties on cotton and the introduction of a Cotton Price Stabilisation Fund. These moves aim to ensure raw material availability at competitive prices and address factors hindering international competitiveness.

As the Union Budget 2025-26 approaches, the Indian textile and apparel industry has put forth significant demands, seeking reforms to bolster its competitiveness on the global stage. A central focus is on ensuring the availability of raw materials at internationally competitive prices, a point underscored in the industry's pre-budget memorandum. The disparity between domestic and international prices has been a persistent challenge.

The industry body points out that major competitors, such as Bangladesh and Vietnam, enjoy unfettered access to essential raw materials. Meanwhile, India's imposition of Quality Control Orders (QCO) on MMF fibre and yarn acts as a non-tariff barrier, constraining imports and affecting the local price landscape. The sector is urging the government to eliminate import duties on various cotton fibre varieties to ease these pressures.

Specialised cotton types like organic and contamination-free cotton, which India currently imports due to lack of domestic availability, face hurdles due to import duties ostensibly aimed at protecting local farmers but negatively impacting the cotton textile value chain. Additionally, the industry has suggested implementing a Cotton Price Stabilisation Fund Scheme, proposing measures such as interest subvention and extended credit limit periods to mitigate the challenges of price volatility, thus enabling better planning and production efficiency for textile mills.

(With inputs from agencies.)