Union Textiles Minister Giriraj Singh says a comprehensive scheme is expected within three months as industry representatives call for relief on tax refunds, yarn costs and garment GST thresholds.
The Indian government is expected to introduce a comprehensive scheme for the textile industry within the next three months, Union Textiles Minister Giriraj Singh announced during his visit to Surat, Gujarat, on October 9, 2026. The announcement followed discussions with textile manufacturers, traders and metallic zari producers, who raised concerns about rising production costs, pending Goods and Services Tax (GST) refunds and pressure on the sector’s financial performance.
The proposed scheme is expected to address concerns affecting different segments of the textile value chain. Industry representatives sought measures to improve cost predictability, resolve outstanding tax-credit issues and support manufacturers, weavers and traders facing pressure from rising input prices. The government has indicated that the concerns raised during the meetings will be examined, although the scheme’s specific provisions have not yet been announced.
Surat’s metallic zari manufacturers raised a specific concern about the difference between GST paid on raw materials and the lower rate applied to finished products. Industry representatives said the inverted tax structure was creating financial losses and leaving input tax credit (ITC) refunds unresolved. The sector called for a policy solution to release pending refunds and reduce the working-capital pressure on manufacturers.
The industry also highlighted a sharp increase in yarn prices. Representatives of the Rapier Jacquard Weavers Association of Surat reported that yarn prices had risen by as much as 66%, increasing costs across the textile value chain. They urged the government to monitor price movements and address concerns about low-priced yarn imports that they said were disrupting the market.
Another major request concerned the GST threshold for readymade garments. Industry representatives demanded that the price limit for garments attracting 18% GST be raised from ₹2,500 to ₹10,000. This remains a proposal from the industry, not an approved tax change. The government has not yet announced any decision on the requested threshold revision.
The proposed textile scheme comes amid broader efforts to strengthen India’s textile manufacturing capabilities. Government initiatives such as PM MITRA and the Production Linked Incentive (PLI) scheme are intended to support investment, manufacturing and the development of branded textile products. The sector has also set an ambition to reach a market size of US$350 billion by 2030, according to statements made by the textiles minister during his Surat visit.
For manufacturers, weavers and textile processors, the impact of the upcoming scheme will depend on its final design, eligibility conditions and implementation timeline. Resolving pending refunds, improving input-cost predictability and clarifying tax-related issues could help businesses plan production and investment more effectively. Until the government publishes the scheme’s details, however, the precise benefits available to individual businesses remain unconfirmed.