Tailoring Customs to Global Trade: Budget 2026 Reforms for Textile, Leather and Footwear
The Union Budget 2026–27 marks a subtle but significant evolution in India’s approach to export facilitation. Rather than dispensing broad incentives or sweeping exemptions, the Budget adopts a targeted and sector-specific strategy, addressing structural inefficiencies that have historically obstructed export competitiveness. These sectors collectively represent a substantial share of India’s merchandise exports and constitute a major source of employment, particularly within the MSME sector. In FY 2024-25, India’s textile and apparel sector, one of the world’s top six exporters, contributed about 2.3 % to GDP, 13% to industrial output, and 12% to merchandise exports, while directly employing over 45 million people, largely through MSME clusters. During the first half of FY 2024-25, textile exports reached around USD 21.4 billion. At the same time, the labour-intensive leather and footwear industry saw exports rise by about 25% to USD 5.7 billion, supporting roughly 4.2 million jobs. The reforms announced reflect a recognition that rigid procedural requirements under duty exemption schemes have often been uneven with the commercial realities of modern global supply chains.
