Five-point plan to make textiles self-reliant
Fibre mission to boost natural and man-made fibres
Cluster upgrades and direct support for MSMEs, weavers and artisans
In her Union Budget 2026-27 speech, Finance Minister Nirmala Sitharaman proposed a comprehensive strategy to achieve self-reliance in the labour-intensive textile sector. The five initiatives comprise the National Fibre Mission for Self-Reliance, Textile Expansion and Employment Scheme, National Handloom and Handicrafts Programme, SAMARTH 2.0, and Mahatma Gandhi Swaraj Initiative.
The National Fibre Mission for Self-Reliance is aimed at strengthening India’s natural fibre ecosystem, including silk, wool, and jute, alongside the promotion of man-made fibres to enhance competitiveness and reduce import dependence, the minister said in the Lok Sabha on Sunday.
3 February 2026
Get the latest issue of Outlook Business
The Textile Expansion and Employment Scheme will seek to modernise traditional textile clusters through capital support for MSMEs, technology upgradation, and the establishment of common testing and certification centres. The National Handloom and Handicrafts Programme, she said, will integrate and strengthen existing schemes and ensure a targeted and direct support to weavers and artisans.
The Tex-Eco Initiative, focused on promoting globally competitive and sustainable textiles and apparel, aligned with international environmental standards while SAMARTH 2.0 will modernise and upgrade the textile skilling ecosystem through deeper collaboration with industry and academic institutions, Sitharaman said.
"Further, I propose the setting up of Mega Textile Parks in challenge mode, with a focus on scale, innovation, and value addition, including technical textiles. Finally, I propose to launch the Mahatma Gandhi Swaraj Initiative to strengthen khadi, handloom, and handicrafts, and to support global market linkages and branding for these heritage sectors," she said.
In a major boost to textile, leather and marine exports, the Budget has extended the export obligation period from six months to 12 months for exporters of garments, footwear and other leather products manufactured using duty-free imported inputs. The move is expected to provide greater operational flexibility, ease compliance, and improve working capital management for exporters, according to a PIB release.
The textile industry welcomes this step. “The Budget’s integrated approach towards strengthening the labour-intensive textile sector is a positive and much-needed step for India’s apparel manufacturing ecosystem. The focus on fibre self-reliance, modernisation of textile clusters, and targeted support for handloom and handicraft segments addresses long-standing structural gaps across the value chain," said Abhishek Dua, Co-Founder, Showroom B2B.
Dua said, "Initiatives such as the National Fibre Scheme and capital support for machinery and technology upgrades will help manufacturers improve productivity, quality standards and supply reliability, which are critical for both domestic growth and export competitiveness. The proposal to set up mega textile parks further strengthens the ecosystem by enabling scale, shared infrastructure and compliance readiness."
