REACTIONS TO THE BUDGET 25-26

Budget 2025: Association Leaders & Experts Share Their Views

Finance Minister Nirmala Sitharaman presented her eighth consecutive Union Budget 2025-26 on February 1, 2025, continuing her tradition of using a digital tablet encased in a traditional ‘bahi-khata’ style pouch. In this budget, significant measures were introduced to stimulate economic growth and support various sectors:

Tax Reforms:

  • Income Tax Relief: The threshold for the nil tax slab was raised to 12 Lakh per year, providing substantial relief to middle-class taxpayers.

Agricultural Initiatives:

  • Pulses Production: A six-year mission was launched to boost the output of pulses, aiming to reduce dependence on imports.
  • Cotton Production: A five-year mission was introduced to enhance cotton production, focusing on research and development to improve yields.

Fiscal Management:

  • Fiscal Deficit Target: The government set a fiscal deficit target of 4.4% of GDP for the fiscal year 2025-26, down from the revised 4.8% in the current year, indicating a commitment to fiscal consolidation.

CMAI President Santosh Katariya’s Reaction to Budget 2025-26

The Budget 2025-26, while not introducing any major schemes specifically for the textile industry, offers indirect benefits that could significantly impact the sector. On the production side, MSMEs, particularly the micro sector, stand to gain from increased upper limits and other supportive measures, though details are yet to be disclosed. The launch of the Cotton Mission is a promising initiative, along with steps aimed at improving export competitiveness, domestic manufacturing capacities, and ease of doing business, all of which are crucial for growth. Additionally, the lowering of Basic Customs Duties on select textile machinery is expected to encourage modernization and efficiency in manufacturing.

On the consumption side, income tax reductions across various levels will likely boost disposable income, leading to higher demand for textiles and apparel. Adjustments in TDS and TCS limits are also expected to stimulate consumption, further benefiting the industry. Overall, the budget receives a positive outlook, but the industry remains cautious about the potential impact of GST rate hikes on textiles and apparel, which could offset these advantages. A balanced approach will be key to ensuring sustained growth.

Reaction form Kumar Rajagopalan CEO Retailers Association of India

Budget 2025 brings positive developments for the retail sector, addressing key expectations such as boosting consumption and supporting MSMEs. The increase in income tax exemption to Rs. 12 lakh is a significant relief, expected to enhance consumer spending and drive business growth for retailers. Additionally, expanded MSME benefits, including easier access to credit, customized credit cards, and the new Fund of Funds, will encourage product innovation and market competition, ensuring a steady supply of diverse offerings.

Regulatory simplifications and state-level reforms will further enhance the ease of doing business, improving the retail landscape. The recognition of gig workers through e-Shram ID cards and health cover strengthens the omnichannel ecosystem, particularly in last-mile delivery and digital commerce. Industry-focused measures for footwear, leather, toys, and electronics will help these sectors scale up, while women workers in retail will benefit from hostels and crèches, promoting better workforce participation. Overall, the budget is progressive and growth-driven, empowering businesses and reinforcing consumption as a key economic driver.

Reaction of Sanjay K Jain, Chairman ICC National Textiles Committee, MD, TT Limited

The Budget 2025-26 brings a significant increase in allocation for the textile sector, rising from Rs. 3,342 crores in FY 24-25 (revised) to Rs. 5,252 crores, primarily boosting ATUF & PLI schemes to ensure faster incentive disbursements. A five-year Cotton Mission has been introduced to enhance productivity and production, addressing India’s low cotton yield of 450 kg/hectare (compared to the global average of 800+ kg). This initiative is expected to strengthen the cotton-based textile industry by ensuring better availability of raw materials. Additionally, a flat 20% import duty or Rs. 115/kg (whichever is higher) on all knitted fabric HS codes will prevent undervalued imports, ensuring a fair market for domestic MMF-based industries.

The budget also supports technical textiles by adding shuttleless looms to the import duty exemption list, encouraging modernization. With a consumption-driven approach, the increase in disposable income for the middle class is expected to drive higher spending on apparel and home textiles. Given that textile manufacturing is largely MSME-driven, with a strong presence of women entrepreneurs, various MSME-focused schemes will have a direct positive impact on the sector’s growth and sustainability.

MSME Forum President Mamta Binani Hails Budget 2025-26

Union Budget 2025-26, announced by Finance Minister Nirmala Sitharaman, introduces transformative measures for MSMEs, focusing on enhanced credit guarantees, increased investment limits, and targeted support for women and young entrepreneurs. These initiatives are set to drive growth, innovation, and global competitiveness, creating essential employment opportunities. The introduction of customized credit cards with a Rs. 5 lakh limit for micro enterprises ensures better access to finance, fostering sustainability and expansion. Additionally, tackling non-tariff barriers and enhancing export competitiveness will open international markets for MSMEs, solidifying India’s position as a global manufacturing hub. This holistic approach supports inclusive and sustainable economic growth, empowering small businesses to scale and thrive.

Mamta Binani, President of MSME Development Forum – West Bengal, has played a key role in corporate governance and legal affairs. She has served on prestigious award juries such as the ICSI National Award, Golden Peacock Award, and ASSOCHAM CSR Award. Holding leadership positions, including Vice President of the Kolkata NCLT Bar Association and Chairperson of the Merchant Chamber of Commerce-Legal Affairs Council, she is also actively involved in INSOL India and the International Women’s Insolvency & Restructuring Confederation (IWIRC). As an Independent Director on boards like Century Ply, Balrampur Chini Mills, and Emami Limited, she believes in bridging government initiatives with businesses and communities, ensuring that government efforts are recognized and leveraged for greater impact.

K.B. Agarwal, President of FOHMA, MD – Rupa & Co. Ltd. expressed his strong approval of the Union Budget 2025-26, highlighting its positive impact on direct consumers. He emphasized that the increase in the income tax exemption limit to Rs. 12 lakh will significantly boost disposable income, enabling individuals to spend more on their daily needs and lifestyle expenses. This increase in purchasing power is expected to stimulate demand across various sectors, particularly in retail, apparel, and essential goods, ultimately benefiting businesses and the overall economy.

He further noted that this consumer-friendly approach aligns with the government’s vision of driving economic growth through enhanced spending power. As people experience higher financial flexibility, they are more likely to invest in better living standards, home improvements, and aspirational products, creating a ripple effect on multiple industries. Agarwal believes that this strategic fiscal move will not only empower the middle class but also strengthen domestic industries, fostering a more vibrant and consumption-driven economy.