Budget 2026 Brings Price Relief for MMF and Cotton Apparel
The Union Budget 2026-27 has introduced a series of incentives aimed at boosting textile manufacturing, which is expected to make sarees, suits, and readymade garments made of Man-Made Fibre (MMF) more affordable. In addition to MMF products, premium cotton apparel is also set to see nominal price reductions, offering some relief to consumers in the textile and apparel market.
Immediate and Long-Term Impact on Pricing
While the impact on pricing is unlikely to be immediate, the incentives rolled out for textile manufacturing are anticipated to lead to gradual price reductions from fabric and garment makers. According to Nikhil Madrasi, president of the Southern Gujarat Chamber of Commerce and Industry, the announcements will enable improvements in technology and quality for both domestic and export markets.
"Efficiently managed costs will in turn help manufacturers to offer better pricing to customers for apparel and textile products," Madrasi stated, highlighting how cost efficiencies could translate into consumer benefits over time.
Key Initiatives Driving Affordability
Several key announcements in the budget are poised to enhance manufacturing efficiency and reduce costs. The continuation of duty-exemption on Extra Long Staple Cotton will help keep prices of premium cotton apparel affordable. Additionally, logistics efficiency is expected to play a crucial role in easing price pressures in the long term.
The proposed Dedicated Freight Corridor linking Dankuni in West Bengal to Surat is set to lower transportation costs and improve market access for the MMF hub. These benefits could gradually reflect in consumer pricing, making textiles more accessible.
Schemes to Modernise the Textile Sector
Budget 2026 includes significant schemes such as Samarth 2.0, aimed at modernising the textile skilling ecosystem, and the establishment of Mega Textile Parks in mission mode. The National Fibre Scheme, along with the Textile Expansion and Employment Scheme and Tex-Eco initiative, will help absorb cost pressures and improve efficiency across the value chain.
Rahul Mehta, chief mentor of the Clothing Manufacturers’ Association of India, emphasised that "the package will help modernise the sector and improve efficiency across the value chain. Enhanced scale and productivity could allow consumers to access better quality textiles at stable prices over time."
Indirect Benefits for Consumers
Support for smaller players and weavers under these initiatives will indirectly benefit consumers by fostering a more competitive and efficient textile market. As manufacturing processes become more streamlined and costs are managed effectively, the overall pricing of apparel and textile products is expected to become more consumer-friendly.
In summary, while the price reductions may not be immediate, the comprehensive measures in Budget 2026 are designed to create a more sustainable and affordable textile industry, ultimately benefiting end-users with better pricing on a wide range of garments.
