Laghu Udyog Bharati (LUB), an Indian MSME organization, points out that as India signs more and more free trade agreements (FTAs), small textile enterprises face multiple obstacles including difficulty in developing alternative markets, lack of funds for technological upgrading, and restricted imports of raw materials, and urgently need government support in marketing, technology, and export practices.

Key Points

  • From April to August 2026, India's textile exports grew 6.94% in dollar terms, but apparel exports fell 9.10%, with combined textile and apparel exports edging down 0.24% year-on-year.
  • LUB has applied to the Ministry of Commerce and Industry for hands-on assistance under the Export Promotion Mission, and requested that the Production Linked Incentive (PLI) be extended to small and medium enterprises.
  • LUB also calls on the Ministry of Labour to mandate training for Industrial Training Institute (ITI) trainees, to complement the National Apprenticeship Promotion Scheme (NAPS) in supplying skilled talent to MSMEs.

Om Prakash Gupta, LUB's national general secretary, said in a media interaction on Wednesday that the government encourages exporters to explore new markets, but this is not easy for small and medium enterprises. "If we have always been supplying to the US and now want to shift to Africa to build a market, that is not simple," he said.

The US is India's largest single export market for textiles and apparel. Gupta noted that the US government's reciprocal tariffs and trade policy uncertainty have clearly hit India's labor-intensive exports to the US. Data shows that from April to August 2026, India's textile exports grew 6.94% in dollar terms, while apparel exports fell 9.10%, bringing cumulative textile and apparel exports down 0.24% year-on-year.

Speaking about the opportunities brought by FTAs, Gupta argued that the competitive conditions are not fair. Large enterprises can benefit immediately from the agreements, while it takes a long time for the dividends to trickle down to MSMEs. He said what exporters really need is more connection channels, support systems, and marketing solutions that can both showcase products overseas and bring buyers to India, yet these mechanisms currently mainly benefit large enterprises.

On the technology front, Gupta pointed out that small enterprises generally lack the capacity for technological upgrading, and there is no longer a technology upgrading fund in the industry; the Production Linked Incentive (PLI) is mainly aimed at large enterprises, and LUB has applied to extend its coverage to small and medium enterprises.

On the raw materials side, Gupta emphasized India's dependence on imports of synthetic fibers. He said the government believes that imposing a minimum import price (MIP) on synthetic fibers has reduced import volumes, but this measure has also suppressed exports of finished fabrics. India currently imposes minimum import price conditions on certain synthetic knitted fabrics to restrict imports.

In terms of policy demands, LUB has proposed to the Ministry of Commerce and Industry that it hopes to obtain targeted assistance under the Export Promotion Mission framework; it also requests the Ministry of Labour to implement mandatory training for Industrial Training Institute (ITI) trainees. Gupta said the government is not satisfied with the operation of the National Apprenticeship Promotion Scheme (NAPS), and if linking ITI training with NAPS is made mandatory, it would be mutually beneficial: both the NAPS and ITI systems would improve, and MSMEs would also gain skilled labor.

These remarks reflect that against the backdrop of India's continuously expanding FTA network, whether small and medium textile exporters can truly share in the agreement dividends still depends on whether supporting conditions such as marketing channels, technology funding, raw material import policies, and skills supply keep pace simultaneously.

Source: MSME body calls for handholding, support as India signs more FTAs · Originally published on 2026-09-30