In a bold move to protect and strengthen the domestic textile industry, the Union Budget 2025-26 has proposed a 20% import duty or 115/kg (whichever is higher) on nine types of knitted fabrics. This strategic measure is designed to curb the influx of cheap imports, particularly from China, and provide a much-needed boost to Indian textile manufacturers.

With nearly 70-80% of HSN codes for knitted fabrics falling under the high import duty bracket, industry stakeholders view this decision as a major victory for local textile producers. The move is expected to encourage domestic production, generate employment, and drive investment in advanced textile technologies, further solidifying India’s position in the global textile market.

Knitted fabrics are extensively used in apparel, activewear, home textiles, and industrial applications, making them a key segment of the textile sector. The increased import duty will discourage low-cost foreign dumping, allowing Indian manufacturers to compete on fairer grounds and expand their production capabilities.

Experts believe that this policy change will not only reduce dependency on imported fabrics but also stimulate local innovation by encouraging businesses to invest in modernized machinery and sustainable textile solutions. The initiative aligns with India’s broader vision of self-reliance (Aatmanirbhar Bharat) and the Make in India campaign, fostering a more resilient and competitive domestic textile industry.

With this tax rationalization, the government has sent a clear message: India is committed to protecting its textile sector while ensuring long-term growth and sustainability. As the industry adapts to this shift, local manufacturers are expected to thrive, contributing significantly to both domestic demand and export markets.