Budget 2026: Mega Textile Parks, Jobs Scheme, & Skilling Drive To Support Tariff-Hit Sector

Besides setting up of mega textile parks aimed at modernising one of the country’s most labour-intensive industries while anchoring growth in traditional strengths, the minister outlined the National Fibre Scheme, man-made and new-age fibres, a Textile Expansion and Employment Scheme, the National Handloom and Handicrafts Programme, and the TEX-ECO initiative, alongside SAMARTH 2.0 for modernised skilling.

The textile sector in the country provides direct employment to around 45 million people. 

"A textile expansion and employment scheme to modernise textile clusters. Aim for Samarth 2.0 to promote skilling in the textile sector. Propose to set up mega textile parks in challenge mode. To launch the Mahatma Gandhi Gram Samaj initiative to support Khadi and handicrafts," the Minister said.

Mahatma Gandhi Gram Swaraj Initiative

On the cards is the Mahatma Gandhi Gram Swaraj -- to strengthen khadi, handloom and handicrafts. The initiative will focus on global market linkage, branding, streamlined training, skilling, quality improvement and process modernisation. It will benefit weavers, village industries, rural youth, and support the One District One Product (ODOP) initiative, a government statement said.

The budget aims to integrate them into export-oriented value chains through better branding, streamlined training and modern production practices.

The budget signals a sharper competitive intent in the changing geo-strategic environment. The proposed mega textile parks, planned in a challenge mode, are designed as integrated manufacturing clusters capable of supporting large-scale production, technical textiles and higher-value addition.

It reflects a clear ambition to move up the value chain and compete more directly with established regional players, particularly Bangladesh, in global sourcing and exports

— Industry Expert

Skilling and workforce readiness form a parallel thrust. SAMARTH 2.0 is expected to deepen collaboration between industry and academia, ensuring a steady pipeline of skilled workers for a rapidly modernising sector.

Skilling Through SAMARTH 2.0

“A textile expansion and employment scheme to modernise textile clusters. Aim for Samarth 2.0 to promote skilling in the textile sector. Propose to set up mega textile parks in challenge mode. To launch the Mahatma Gandhi Gram Samaj initiative to support Khadi and handicrafts,” Sitharaman added.

The Union Budget 2026–27 reflects a clear strategic vision to position India as a global textile manufacturing and export hub, while ensuring inclusive growth, sustainability and large-scale employment. “The Ministry will work closely with States, industry, MSMEs, artisans and skilling institutions to ensure timely and effective implementation of these initiatives,” the Textile Ministry said in a statement.

Promotion Measures

The following measures have been announced for boosting textiles sector

• Extension of the export obligation period from 6 months to 12 months for exporters of textile garments manufactured using duty-free imported inputs.
• This measure will provide greater operational flexibility, ease of compliance and improved working capital management for exporters. 
• To further strengthen liquidity access for textile MSMEs, the Government has announced key measures to enhance the effectiveness of the Trade Receivables Discounting System (TReDS), under which over ₹7 lakh crore has already been facilitated.