How Union Budget 2025 can unlock India's manufacturing potential

Global manufacturing needs a new centre. India is ready to build it. The Union Budget 2025 can lay the foundation for this shift, powered by millions of skilled workers and entrepreneurs who are already reimagining what ‘Made in India’ means for the world.

This moment demands more than incremental change. With manufacturing growing at 5.8 per cent, supply chains realigning globally and the China+1 strategy opening new doors, India’s $3.5 trillion economy has a clear path forward. Our success will strengthen not just factories and workshops, but our promise of Atmanirbhar Bharat.

A sector full of potential yet held back

The apparel, leather and textile manufacturing industries are major contributors to the GDP, accounting for over 17 per cent, while providing jobs to millions, including a huge chunk of the unorganised workforce, from large industrial parks to small rural mills. However, obsolete infrastructure, increasing expenses and technological advancement are some of the factors that hinder these industries from being competitive in the world market.

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Regions with leading economies such as Vietnam and China are already ahead in this competition with India is grappling due to an overreliance on imports. The China +1 strategy has the potential to change the narrative for India given that it attempts international investors to make India an excellent alternative for international manufacturing. In effect showing the world that India has an industrial base that is trustworthy and competent enough. But to utilise this opportunity, there is a lot more to be done as simply adopting policies cannot correct this situation, but there is the need to bring about fundamental policy changes that allow the Indian economy to compete internationally.

What the sector needs from the Union Budget?

The upcoming budget holds the potential to be a defining moment for sectors and industries such as textiles, leather and manufacturing especially when they’re overcoming challenges such as inflated costs, substandard infrastructure and the imperative need to embrace sustainability. However, the real question now is – will the budget address the concrete realities and unlock the nation’s true potential?

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2. The manufacturing sector anticipates reduction in duties on renewable energy equipment, green technologies as well as incentives for industries that adopt low-impact sustainable materials and economically efficient manufacturing methods.

3. Expansion on initiatives like PM MITRA parks, PLI schemes and SU.RE Resolutions facilitate reaching the manufacturing sustainability goals.

4. Simplified trade related processes and strong financial support through schemes like duty drawback, RoDTEP and interest equalization scheme is also foreseen.

5. Positing districts as export hubs and expanding the National Single Window System (NSWS) can minimize trade frictions and empower small scale exporters.

6. In the mid of this, the leather manufacturing sector is also hopeful of its inclusion in the PLI Scheme, which has the potential to attract significant investments and generate lucrative employment opportunities. In addition to this, there is also a concentrated effort to lower or remove import duties on raw materials and machinery to align the costs.

7. The manufacturing industry anticipates increased funding for their upskilling and reskilling initiatives such as Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and Samarth scheme in order to bridge the significant skill gap in the sector and for preparing the workforce with the key skills to embrace industry 4.0 technologies, AI, IoT and green technologies.

8. Another area of consideration should be introduction of tax incentives for sectors such as renewable energy, waste management and sustainable packaging. Additionally, bracing policies with global ESG benchmarks is vital to not only encourage sustainable growth but also improve the nation’s export potential.

A budget for PEOPLE

At its core, this economic exercise is not merely focused on the industries – it’s fundamentally about the people. Every penny spent on manufacturing or infrastructure ultimately translates into employment generations, economic stability and financial independence for families all over the nation.

For instance, India is one of the largest leather exporters in the world, but behind every luxurious bag or pair of shoes is the story of those skilled artisans and small-scale manufacturers who are wrestling to compete globally. Hence, the need of the hour is not just financial aid but a visionary roadmap that evens the odds and empower businesses of all sizes to prosper. This is where this budget can make a difference!

For the youth, currently setting their foot in the world of work, a sturdy manufacturing environment creates a prospect to forge career opportunities and play a role in the nation’s growth journey. This isn’t just an economic boom but a significant transformation socially as well as culturally.

India’s moment on the global stage

The global manufacturing terrain is changing, with India at the centre of this transformation. India’s demographic dividend, skilled workforce, and ambitious policies offer an unparalleled opportunity positioning us as a worthy alternative to nations like China. But to capitalize on this, the government must create an enabling space where innovation thrives, businesses are empowered, and international partnerships are encouraged. Policies that advance research and development, ease regulatory compliance and draw in foreign funds can give India the edge it needs.

Time to dream big

This is an exciting time to be an Indian, for manufacturers alike. The spirit, ambition and opportunities in the air are tangible as well as graspable. But with great power comes great responsibility, not just for the government but for us industry stakeholders and consumers as well.

The Union Budget 2025-26 has the potential to transcend metrics and create a legacy of empowerment and growth. By serving the needs of sectors like manufacturing and textiles, it can lead the way for a more self-reliant India, one that is not just a participant in the global marketplace but a leader.

As we await the Budget, the hope is simple, that it mirrors the aspirations of every worker, artisan and entrepreneur who swears by the promise of a favourable and better tomorrow. Because in the final analysis, the real measure of a budget isn’t its allocations – it’s the lives it transforms.

The author is President, Apollo Fashion International Limited. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.