Coimbatore Textile Industry Applauds Budget 2026 Initiatives
Textile and allied industrial organizations in the Coimbatore and Tirupur regions have expressed their approval of the Union Budget 2026, highlighting several measures that they believe will accelerate modernization efforts, enhance global competitiveness, and foster growth led by micro, small, and medium enterprises (MSMEs). The budget has been met with optimism for its potential to strengthen India's industrial landscape, particularly in the textile and engineering sectors.
Key Budget Measures Welcomed by Industry Leaders
Durai Palanisamy, chairman of the Southern India Mills Association, praised the introduction of the National Fibre Scheme as a significant step toward bolstering raw material availability. He emphasized that this initiative promotes self-reliance across a diverse range of fibres, including natural options like silk, wool, and jute, as well as man-made and new-age fibres. Palanisamy also highlighted the Capital Support Scheme for modernization, projecting that it could attract investments worth $100 billion by 2030, thereby transforming the industry's infrastructure.
Mithun Ramdas, president of the Southern India Engineering Manufacturers Association, welcomed the budget's focus on supporting engineering growth and MSMEs. He particularly appreciated the decision to permit mining of rare earth permanent magnets in states such as Tamil Nadu, noting that this move could reduce India's dependence on China and strengthen domestic supply chains. Ramdas further advocated for recognizing Coimbatore as a key hub to boost local fabrication and heavy engineering, leveraging the region's industrial expertise.
A Sakthivel, chairman of the Apparel Export Promotion Council, stated that the budget measures would significantly enhance the global competitiveness of India's apparel industry, with a special emphasis on benefiting MSMEs. Similarly, K M Subramanian, president of the Tirupur Exporters Association, highlighted the exemption of basic customs duty on textile machinery, including shuttle-less looms, as a crucial step that would lower investment barriers and facilitate modernization efforts.
Unresolved Concerns and Criticisms
Despite the positive reception, several stakeholders raised unresolved issues that they believe need urgent attention. Durai Palanisamy urged the Centre to remove the 11% import duty on cotton, citing quality concerns and the necessity to meet export commitments effectively. This sentiment was echoed by M Jayapal, chairman of the Recycled Textile Federation, who expressed disappointment over the continued imposition of this duty, arguing that it restricts access to raw materials at international prices and hampers the industry's growth.
M Karthikeyan, president of Codissia, welcomed the proposal to constitute a high-level committee on banking, viewing it as a potential solution to bridge MSME funding gaps. However, he expressed disappointment that the long-pending demand to reduce income tax for partnership firms from 30% to 20% was not addressed in the budget, leaving a critical financial concern unresolved for many businesses.
James, president of the Tamil Nadu Association of Cottage and Micro Enterprises, termed the Rs10,000 crore allocation for MSMEs as inadequate, calling for stronger financial support to ensure the sustainability and growth of smaller enterprises. Additionally, Vanitha Mohan, an environmentalist, criticized the budget for lacking concrete measures on environmental protection, particularly in areas such as waste management and safeguarding water bodies amid rising pollution levels.
Overall Industry Sentiment
Rajesh B P Lund, president of the Indian Chamber of Commerce, provided a broader perspective, describing the budget as favourable for long-term growth and economic stability. While the textile and industrial bodies in Coimbatore and Tirupur have largely welcomed the budget's initiatives aimed at modernization and MSME-led growth, they continue to advocate for addressing key issues such as cotton import duties, taxation reforms, and environmental priorities to fully realize the budget's potential benefits.
