The government is reviewing GST, customs duties and anti-dumping measures across the textile value chain to reduce production costs and strengthen India’s competitiveness in global apparel markets.
India is developing an integrated taxation framework for its textile and apparel industry, targeting lower raw-material costs, cheaper machinery imports and greater tax certainty for manufacturers.
According to reports published on October 27, 2026, the Ministry of Textiles and Department of Revenue are examining industry proposals covering Goods and Services Tax (GST), basic customs duties and anti-dumping duties. No new tariff reductions have yet been approved.
Duty Relief for Fibres, Yarns and Chemicals
The Ministry of Textiles has recommended eliminating customs duties on four important raw materials: caprolactam, nylon chips, rayon-grade wood pulp and cotton.
It has also proposed removing or postponing anti-dumping duties on elastomeric filament yarn and viscose rayon filament yarn, citing their impact on downstream manufacturers and smaller textile enterprises.
Separately, industry representatives have requested a six-month customs duty exemption on five polyester-chain products:
- Monoethylene glycol (MEG)
- Purified terephthalic acid (PTA)
- Partially oriented yarn (POY)
- Fully drawn yarn (FDY)
- Drawn textured yarn (DTY)
The requests follow the withdrawal of temporary MEG and PTA duty exemptions in July 2026.
Textile Machinery Modernisation
The government is also reviewing import duties on textile machinery to reduce capital investment costs.
The proposed reforms complement the Textile Expansion and Employment Scheme, announced in India’s FY2026–27 budget to support machinery modernisation, technology upgrades and common testing facilities in traditional textile clusters.
The government allocated ₹1,500 crore to the broader Integrated Textile Programme in FY2026–27, which includes the expansion scheme and four other initiatives.
Implications for Textile Competitiveness
India’s textile sector accounts for approximately 9% of merchandise exports and supports more than 45 million jobs.
Lower input duties could strengthen the competitiveness of spinning, weaving, knitting, processing and garment manufacturers, particularly in man-made fibres and technical textiles.
However, cheaper imports may increase pressure on domestic upstream producers.
The critical next development will be the government’s final duty structure, implementation schedule and treatment of competing interests across the textile value chain.
