In the Union Budget 2026-27, Finance Minister Nirmala Sitharaman has announced plans to establish mega textile parks aimed at boosting manufacturing, and supporting traditional industries like khadi, handlooms, and handicrafts.

A major component of the initiative is the launch of SAMARTH 2.0, a skill development program designed to modernise and upgrade the workforce. The government also introduced measures to promote new-age fibres and set up textile clusters. A key part of the plan is the Mahatma Gandhi Gram Swaraj Scheme, which aims to connect traditional crafts to global markets through branding, training, and market support. The announcements featured a textile labour incentive scheme, a national handloom and handicrafts program, and a new initiative to strengthen the textile skilling system. Additionally, the government has proposed a textile expansion plan that focuses on modernizing the industry with capital support for machinery, as well as the introduction of a National Fibre Scheme.

This policy shift aligns with India’s textile and apparel exporters recalibrating their strategies, especially after the recent signing of free trade agreements with the European Union and the United Kingdom. These agreements are expected to improve market access, enhancing the competitiveness of Indian textile exports in key international markets.