Union Budget 2026 boosts MSMEs, Khadi, handloom, silk and textile industry in Uttar Pradesh

The Union Budget 2026-27 includes several major provisions to boost Micro, Small and Medium Enterprises (MSMEs), Khadi, handloom, silk, and textile industries. The government has proposed a comprehensive integrated program for the textile sector, including schemes like the National Fibre Policy, Textile Expansion & Employment Scheme, National Handloom & Handicrafts Program, Tex-Eco initiative and Samarth 2.0. These initiatives aim to increase production, create jobs and promote exports. Mega textile parks in Uttar Pradesh will provide new investment opportunities in the sector.

Rakesh Sachan, Minister for MSMEs, Khadi & Village Industries, Silk, Handloom, and Textile, said the budget will open new opportunities for industries, farmers and youth. The Mahatma Gandhi Gram Swaraj initiative will promote Khadi, handloom, and handicrafts. It will provide sustainable livelihood opportunities for artisans and weavers while connecting traditional industries to modern markets.

The budget proposes a Rs 10,000 crore SME Growth Fund to support small businesses. An additional Rs 2,000 crore will be added to the Aatmanirbhar Bharat Fund. The TReDS (Trade Receivables Electronic Discounting System) platform will expand to provide timely payments and financial assistance, reducing working capital challenges for small enterprises.

The government plans to introduce a 'Corporate Friend' system to provide MSMEs with business guidance, technical support and market linkages. Additionally, 200 heritage industrial clusters, including handloom and handicrafts clusters, will be revitalized. Export incentives such as duty-free imports of shoe uppers and extended timelines for leather and textile garment exports aim to make Indian products more competitive globally.