Union Budget 2025-26: EPCH Hails Strategic Measures to Boost Handicrafts, MSMEs, and Export Ecosystem

New Delhi – 01st February, 2025: In a landmark announcement today, Nirmala Sitharaman, Union Finance Minister of India, presented the Union Budget for 2025-26, unveiling a strategic roadmap to boost exports, empower MSMEs, and enhance trade facilitation. The budget has been hailed as a game-changer for key sectors like handicrafts, manufacturing, and toys, with measures aimed at fostering inclusive growth and global competitiveness.

Dileep Baid, Chairman of the Export Promotion Council for Handicrafts (EPCH), lauded the budget for its comprehensive focus on increasing exports, particularly through initiatives targeting MSMEs, digital trade infrastructure, and sector-specific incentives. He highlighted several measures that directly benefit the handicrafts sector, which EPCH has long championed at various forums.

Key Highlights of the Budget:

Duty-Free Imports for Handicrafts

In a significant move, the government expanded the list of items eligible for duty-free imports under the Import of Goods at Concessional Rate of Duty (IGCR) scheme for bonafide handicraft exporters. Previously limited to nine items, the list now includes an additional nine categories:

• Electric parts for lamps, clocks, and Christmas ornamentation.
• Chemicals and lacquers for product finishing.
• Wood polish materials and adhesive/glue.
• Natural materials like sea shells, mother of pearl, cattle horn, and bone.
• Compact Fluorescent Lamps (CFLs) and bulbs.
• Resins and essential oils.

Furthermore, the time limit for utilizing imported inputs has been extended from six months to twelve months, with the possibility of a three-month extension. Quarterly reporting requirements have replaced monthly statements, easing compliance burdens for exporters.

Export Promotion Mission

To bolster India’s export ecosystem, the government announced the establishment of an Export Promotion Mission , jointly driven by the Ministries of Commerce, MSME, and Finance. This mission will provide easier access to export credit, cross-border factoring support, and assistance for MSMEs navigating non-tariff barriers in international markets.

Bharat Trade Net (BTN)

A transformative initiative, Bharat Trade Net (BTN) , was introduced as a unified digital platform for international trade documentation and financing solutions. Aligned with global standards, BTN aims to streamline processes, reduce transaction costs, and enhance efficiency for exporters and importers alike.

Revised Classification Criteria for MSMEs

Recognizing the critical role of MSMEs, which account for 45% of India’s exports, the budget revised classification criteria by increasing investment and turnover limits by 2.5 times and 2 times, respectively. This move is expected to enable MSMEs to scale operations, adopt advanced technologies, and access larger capital pools.

Credit Cards for Micro Enterprises

Under a new scheme, micro-enterprises registered on the Udyam portal will receive customized credit cards with a Rs. 5 lakh limit in the first year, empowering small businesses to meet working capital needs.

Support for First-Time Entrepreneurs

The budget also unveiled a loan scheme for women, Scheduled Castes (SC), and Scheduled Tribes (ST) entrepreneurs entering business for the first time. Term loans of up to Rs. 2 crore will be available over the next five years, promoting inclusivity and entrepreneurship among marginalized communities.

National Centres of Excellence for Skilling

Five National Centres of Excellence for Skilling will be established in collaboration with global partners to develop specialized skills required for “Make for India, Make for the World” manufacturing. These centers aim to bridge skill gaps and prepare India’s workforce for future challenges.

Integration with Global Supply Chains

To strengthen India’s position in global supply chains, the government plans to identify priority sectors based on objective criteria. Facilitation groups comprising senior officers and industry representatives will be formed to address specific products and supply chain needs.

Customs and Tax Reforms

The budget proposed several reforms to simplify customs procedures and taxation:

• A two-year time limit (extendable by one year) for finalizing provisional assessments under the Customs Act, reducing uncertainty for traders.
• Rationalization of Tax Deduction at Source (TDS) rates and thresholds, including raising the annual TDS limit on rent from Rs. 2.40 lakh to Rs. 6 lakh.
• Reductions in customs duties for items like marble, steel furniture, and imitation jewelry, lowering production costs.

National Action Plan for Toys

In line with the ‘Made in India’ vision, the government launched a National Action Plan for Toys to establish India as a global hub for high-quality, innovative, and sustainable toys. The plan includes developing clusters, enhancing skills, and creating a robust manufacturing ecosystem.

Industry Leaders Weigh In

Dileep Baid emphasized that initiatives like Bharat Trade Net and the Export Promotion Mission would significantly aid MSMEs in overcoming non-tariff barriers abroad. He noted that reforms such as revised MSME classifications, credit card schemes, and skilling centers align with Prime Minister Narendra Modi’s vision of a developed India (Viksit Bharat ) by 2047.

Neeraj Khanna, Vice Chairman of EPCH, praised the inclusion of nine new items in the duty-free import list, stating that it would reduce input costs and encourage the use of diverse raw materials. He added that these measures reflect the government’s commitment to boosting exports and improving infrastructure for MSMEs.

Sagar Mehta, Vice Chairman II of EPCH, described the budget as a forward-looking blueprint fostering innovation and inclusive growth across sectors. He commended the emphasis on MSMEs, investments, and exports, along with significant tax and regulatory reforms.

R.K. Verma, Executive Director of EPCH, reiterated that the budget lays a solid foundation for realizing the principle of ‘Sabka Vikas’ (development for all). He highlighted the importance of reduced input costs, the National Action Plan for Toys, and support for segments like leather, which will spur innovation and expansion in domestic manufacturing.

The Union Budget 2025-26 underscores the government’s resolve to position India as a global economic powerhouse while ensuring inclusive and sustainable growth. By addressing the needs of MSMEs, streamlining trade processes, and fostering innovation, the budget charts a clear path toward achieving the vision of a Viksit Bharat —a developed and prosperous India.