Ahead of the upcoming Assembly elections, Tamil Nadu Finance Minister Thangam Thennarasu presented the Interim Budget for 2026–27, allocating ₹1,943 crore (~$214.10 million) exclusively for the Handlooms and Textiles Department. The allocation comes alongside ₹1,943 crore (~$214.10 million) for MSMEs and ₹4,282 crore (~$472.04 million) for Industries, measures that collectively strengthen the broader textile-manufacturing ecosystem.

A major structural thrust comes through the continued implementation of the Tamil Nadu Technical Textile Mission, signalling a policy shift towards higher-value segments. In line with this direction, ₹6 crore has been allocated for establishing an Advanced Quality Testing Laboratory at SITRA, Coimbatore, aimed at promoting athleisure, sports textiles and other technical textile manufacturing. The facility is expected to strengthen quality assurance, compliance capabilities and export competitiveness in performance-oriented textiles.

Industry body The Southern India Mills Association (SIMA) has welcomed the budget. SIMA’s Chairman Durai Palanisamy thanked the state Chief Minister MK Stalin for significant support towards implementing measures under the recently released Tamil Nadu Integrated Textile Policy 2025–26. He highlighted that adequate funds have been allocated for handloom parks, power loom modernisation, installation of shuttle less looms and attracting new investments in processing, technical textiles and garmenting.

Electricity support, a critical cost factor for the textile sector, has also been strengthened. Free electricity benefits for handloom and power loom weavers have been enhanced, easing operating costs for clusters in Coimbatore, Erode, Salem and surrounding regions. In addition, the proposal to release a New Integrated Renewable Energy Policy, backed by a budget allocation of ₹18,091 crore, is expected to enhance renewable energy capacity in the State. This could further support textile mills that rely heavily on captive and renewable power.

On infrastructure and labour, the State continues to expand its industrial ecosystem through SIPCOT parks and worker housing initiatives, supporting labour-intensive garment manufacturing. Skill development initiatives, including upgrades to ITIs into Industry 4.0 Technology Centres, are expected to strengthen workforce readiness for modern textile production.

Overall, while the Interim Budget does not announce a new mega garment park or large standalone capital subsidy, it reinforces cluster-based development, modernisation of looms, renewable energy expansion and a strategic pivot towards technical textiles. These measures are likely to shape investment sentiment and competitiveness in Tamil Nadu’s textile and garment industry in 2026–27 and beyond.

Fibre2Fashion News Desk (KUL)