EPCH lauds Historic Boost for Handicrafts Sector in Union Budget 26-27

New Delhi – 01st February, 2026: The Export Promotion Council for Handicrafts (EPCH) has welcomed the Union Budget 2026-27 presented by Finance Minister Nirmala Sitharaman, which introduces landmark initiatives for the handicrafts sector, including the Mahatma Gandhi Gram Swaraj Initiative and comprehensive support measures spanning manufacturing, exports, skilling, digital infrastructure and rural empowerment.

Welcoming the budget announcements Dr. Neeraj Khanna, Chairman – EPCH said that the Union Budget 2026 outlines a strategic framework for increasing exports, focusing on MSMEs, infrastructure, digital trade facilitation and sector-specific incentives. The Budget 2026 contains some benefits for handicrafts sector which are indicated below:

•⁠ ⁠Mahatma Gandhi Gram Swaraj Initiative: An initiative to strengthen khadi, handloom and handicrafts through training, skilling, quality improvement, branding and global market linkages, benefiting weavers, village industries, ODOP products and rural youth.

•⁠ ⁠Integrated Programme for the Textile and Handicrafts Sector: An integrated programme covering modernisation of traditional clusters through capital support for machinery, technology upgradation and common testing and certification centres; a National Handloom and Handicraft Programme for strengthening existing schemes; promotion of sustainable production under Tex-Eco; and skilling upgradation through Samarth 2.0.

•⁠ ⁠Creation of “Champion MSMEs” and Support to Micro Enterprises: Liquidity support measures to include credit guarantee for invoice discounting on Trade Receivables Discounting System (TReDS) through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and linkage of Government e Marketplace (GeM)with TReDS to enable faster and cheaper access to finance for MSMEs.

•⁠ ⁠Rejuvenation of Legacy Industrial Clusters: A scheme has been introduced to revive 200 legacy industrial clusters to improve their cost competitiveness and efficiency through infrastructure and technology upgradation.

•⁠ ⁠Design Education and Innovation: A new National Institute of Design will be established in the eastern region to boost design education and address the shortage of Indian designers, creating a talent pipeline for the handicrafts and creative industries.

•⁠ ⁠Capital Goods Capability: Hi-Tech Tool Rooms to be set up by Central Public Sector Enterprises (CPSEs) at two locations as digitally enabled automated service bureaus for design, testing and manufacture of high-precision components.

•⁠ ⁠Rationalisation of TCS on Overseas Tour Programme Packages: Tax Collected at Source (TCS) on overseas tour programme packages reduced to 2 % without any threshold limit.

•⁠ ⁠Customs Process – Trust-Based Systems: Duty deferral period for Tier-II and Tier-III Authorised Economic Operators enhanced from 15 days to 30 days.

•⁠ ⁠Ease of Doing Business: Cargo clearance approvals from multiple government agencies to be processed through a single, integrated digital window.

•⁠ ⁠Special Economic Zone Flexibility: As a special one-time measure, eligible manufacturing units in SEZs will be allowed to sell to the Domestic Tariff Area (DTA) at concessional duty rates, addressing capacity utilization concerns due to global trade disruptions.

•⁠ ⁠New Export Opportunities through E-commerce: Removal of the ₹10 lakh per consignment value cap on courier exports and simplification of procedures for returns and rejected consignments.

Dr. Neeraj Khanna, Chairman – EPCH further shared that “The Union Budget 2026-27 marks a transformative moment for India’s handicrafts sector. The introduction of the Mahatma Gandhi Gram Swaraj Initiative represents an integrated approach to strengthening khadi, handloom, and handicrafts through enhanced global market linkages, branding, and skill development. Provisions such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and initiatives aimed at improving enterprise resilience and scale will contribute to long-term growth of the handicrafts sector and support the broader objective of inclusive and sustainable economic development in line with the Prime Minister’s vision of Viksit Bharat.”

Dr. Rakesh Kumar, Director General in the role of Chief Mentor, EPCH and Chairman, IEML shared that “The Union Budget 2026–27 has taken a pragmatic and timely step to support export-oriented manufacturing during a phase of global trade disruptions. The special one-time flexibility for eligible manufacturing units in Special Economic Zones (SEZs) to sell into the Domestic Tariff Area (DTA) at concessional duty rates will help address capacity utilisation challenges and enable units to maintain production continuity and employment. “This, combined with the Government’s trust-based customs measures and the move towards a single integrated digital window for cargo clearances, strengthens ease of doing business and reduces friction across the supply chain. For export-linked sectors such as handicrafts, these interventions improve operational resilience, support faster order fulfilment, and create a stronger foundation for sustained competitiveness in both domestic and global markets.” Dr. Kumar added further.

Sagar Mehta, Vice Chairman – EPCH said that “The Budget’s focus on creating Champion MSMEs through a SME Growth Fund and enhanced liquidity support through TReDS (Trade Receivables Discounting System) will be a game-changer for our handicraft enterprises. The revival of 200 legacy industrial clusters will now modernize traditional handicraft hubs and will improve competitiveness in domestic as well as international market.”

Rajesh Rawat, Executive, Director – EPCH said that “The digital integration initiatives and trust-based customs systems announced in this Budget will significantly reduce transaction costs and time for our exporters. The single digital window for clearances demonstrates the government’s commitment to ease of doing business. Through the establishment of a National Institute of Design in the eastern region, a skilled workforce will be created that will combine traditional craftsmanship with contemporary design sensibilities. Combined with the Mahatma Gandhi Gram Swaraj Initiative’s focus on skill development and quality improvement, these measures will enhance the global competitiveness of Indian handicrafts while ensuring sustainable livelihoods for millions of artisans across the country”.