India’s Textile and Apparel sector is the backbone of the economy and is considered the second largest sector after agriculture in terms of employment. The industry has big expectations from Budget 2026, especially when India has signed many FTAs, but their full benefits are not yet visible at the ground level. Textile sector contributes significantly to GDP, exports and industrial production and provides direct employment to about 4.5 crore people. About 80% of its production comes from MSMEs, which are struggling with high input costs, complex compliance, slow refunds and skill gaps. The industry expects Budget 2026 to focus on monetizing FTAs, faster refunds, working capital support, man-made fibres, technical textiles and infrastructure investment. With skill development, digital tools and R&D, India can move from cost-based model to capability-led growth. Now the question is – will Budget 2026 be able to make India a global textile hub?

Us tarifs impact on textile sector: The additional 25 percent tariff as a panalty installed by US President Donald Trump has become effective today i.e. on Wednesday morning at 9.11 am. Indian goods were already getting 25 percent tariff in the US, in such a situation, after the additional 25 percent tariff, now the total rates have increased to 50 percent. This additional tariff from President Trump has been imposed on India due to buying cheap oil from Russia. India has been continuously saying that it has been unnecessarily imposed.

Earlier on Monday, a draft was issued for the US Department of Homeland Security to put 50 percent tariff on Indian goods. In such a situation, after the high tariff, the President is hoping that his Russian equivalent President Vladimir Putin will be pressurized and will help in his attempt to stop the war with Ukraine.

PM’s emphasis on Swadeshi

On the other hand, PM Modi insisted on Swadeshi during a meeting on Tuesday. He said that my side is very simple. I am not worried about whose money it is, it is dollar or where has it come from and where it came from … but it is important that both hard work and sweets should be of Indian.

He cited the US tariff during the public meeting in Ahmedabad and said that India will face any external pressure. He ensured the public that the interests of farmers, dairy spinach and small small scale industries would be given priority first.

Tremendous hit on textile industry

On the other hand, 50 percent of the tariff of Trump has been hit by business like cloth, leather and shrimp fish. For their exports, it is now becoming very difficult to compete in the US market. Because of this, the owners are being forced to lock many factories.

According to reports, the Federation of Indian Export Organization, an organization of Indian exporters, said that industries like leather, textiles, chemicals are in a huge crisis. Fio Chairman S.C. If the Ralhan is to be believed, then from Surat, Tirupur to Noida, many aperal and textile manufacturers have stopped it due to increase in production costs. He says that it has become very difficult for India to compete with the exporters of Bangladesh and Vietnam. India’s export sector is now lagging behind, which is directly impacting the livelihood of millions of people in this sector.

Also read: After 50% tariff on India, now Trump threatens to put 200% to China, know what is the whole matter