Tamil Nadu Budget 2026: Textile Industry Welcomes Investment Push, Seeks Relief on Power Costs
Budget allocations for textiles, MSMEs and industrial infrastructure receive industry support
The textile industry across Coimbatore and Tiruppur has largely welcomed the Tamil Nadu Budget 2026, describing it as a growth-oriented roadmap that will encourage investments, strengthen manufacturing and enhance the State’s competitiveness. However, industry bodies have also urged the government to address long-pending concerns over electricity fixed charges and solar network fees.
The State government has allocated ₹1,678 crore for the Handlooms and Textiles sector, ₹2,022 crore for Labour Welfare and Skill Development, and ₹4,414 crore for the Industries Department. Industry leaders believe these investments, along with new initiatives for textile technology, technical textiles and design, will support the next phase of industrial growth.
Industry welcomes textile-focused initiatives
Southern India Mills Association (SIMA) Chairman Durai Palanisamy said the allocations for textiles, labour welfare and industries would create a favourable environment for fresh investments. He added that initiatives such as the proposed Textile Technology Centre, Technical Textiles Transformation Scheme, Tamil Nadu Institute of Designs, and the Loom Modernisation Scheme would benefit both the textile and apparel sectors.
Apparel Export Promotion Council (AEPC) Chairman A. Sakthivel described the Budget as progressive, highlighting measures including a new Industrial Policy, Tamil Nadu Single Window 3.0, expansion of SIPCOT industrial parks with ₹3,500 crore, ₹2,142 crore for MSMEs, and increased support for the textile sector. According to him, these initiatives will improve ease of doing business, attract investments, strengthen manufacturing and boost export competitiveness.
Tiruppur industry expects stronger competitiveness
Tiruppur Exporters‘ Association President K.M. Subramanian welcomed the announcement of a Textiles Technology Centre in Tiruppur, saying it would enhance the global competitiveness of the district’s garment manufacturing industry. He added that investments in industrial infrastructure would further encourage business expansion.
South India Hosiery Manufacturers’ Association President P. Shanmugasundaram said the increased allocation for textiles and MSMEs is expected to create employment opportunities while promoting industrial investments.
Reliable power seen as key growth driver
South India Spinners’ Association President R. Arun Karthik appreciated the Budget’s focus on the power sector, noting that electricity remains one of the largest production costs for manufacturers. He said improved power reliability and greater adoption of green energy would support sustainable industrial growth over the long term.
Similarly, the Open End Spinning Mills Association Tamil Nadu welcomed the government’s focus on infrastructure and industrial development, stating that the initiatives would improve power availability, attract investments and strengthen the competitiveness of the textile industry.
Industry seeks action on electricity charges
Despite the positive response, several industry bodies expressed disappointment that the Budget did not address long-standing demands related to electricity costs.
Tamil Nadu All Entrepreneurs’ Federation State General Secretary and Recycle Textile Federation President Jayabal said the Budget failed to meet the expectations of the State’s 4.8 million MSME entrepreneurs, particularly regarding a 50% reduction in electricity fixed charges and the waiver of solar network charges, both of which had been sought by the industry.
The Open End Spinning Mills Association Tamil Nadu also noted that the long-pending demand to reduce fixed charges for LT, CT and HT electricity service connections remains unresolved.
Meanwhile, the Tamilnadu Weavers Association’s Federation welcomed the ₹1,678 crore allocation for the textile sector, describing it as a positive step for the industry.