Finance Minister Nirmala Sitharaman will present the Union Budget 2025-26 on February 1, with expectations running high, especially in the textile and MSME sectors. Reports suggest potential income tax relief for individuals earning up to Rs15 lakh, a move that could benefit the middle class.
Rajeev Gupta, CEO of RSWM Limited, outlined key demands from the textile industry to enhance cost competitiveness and viability. He stressed the need to liberalize raw material imports, citing that Indian firms pay higher prices due to quality control orders (QCOs) on man-made fibres (MMF) and yarn. Reducing customs duties on MMF fibres and essential chemicals would ensure a more competitive market.
Gupta also highlighted concerns about the Production-Linked Incentive (PLI) scheme, which currently applies only to synthetic fibres. Extending PLI across the entire textile industry would drive investments. He urged the reinstatement of the Technology Upgradation Fund Scheme (TUFS) to support machinery upgrades.
Further, he recommended replacing the MSP-based cotton procurement system with a Direct Benefit Transfer (DBT) model, improving farmers’ liquidity. A Cotton Price Stabilisation Fund and extended credit limits for cotton procurement would help mitigate price volatility.
Lastly, Gupta called for deferring Section 43B(h) of the IT Act, which taxes companies on unpaid MSME invoices after 45 days. He argued that textile production cycles exceed this timeframe, disrupting industry operations. A phased rollout of this rule, he suggested, would allow better adaptation.
