Union Budget 2025-26: Empowering Fashion-Tech and Innovation for a Sustainable Future

The Union Budget 2025-26 introduced by the government signals a transformative phase for India's economy, with a strong emphasis on innovation, sustainability, and empowering key industries like fashion-tech and MSMEs. The strategic allocations outlined in the budget promise to be a game-changer for businesses, especially in sectors poised for digital growth and technological advancements.

Investment in Deep-Tech and AI Innovation

One of the key highlights of this year’s Union Budget is the ₹500 crore allocation aimed at promoting deep-tech and AI innovation. This funding is expected to accelerate the development of AI-led advancements and data-driven solutions, giving businesses the tools to scale efficiently. As artificial intelligence continues to revolutionize industries, this move positions India as a leader in AI research and application, fostering innovation across all sectors, including fashion-tech.

Focus on Innovation with ₹20,000 Crore for New Technologies

The Union Budget also earmarks ₹20,000 crore to support innovation, with the creation of a dedicated Deep Tech Fund. This investment will play a pivotal role in accelerating the adoption of next-generation production technologies. For fashion-tech companies like VIRGIO, which are at the forefront of integrating technology with retail, this funding offers the opportunity to explore and scale advanced solutions for more efficient and sustainable operations.

Mission for Cotton Productivity: A Step Towards Sustainability

In an effort to enhance India's cotton production, a five-year Mission for Cotton Productivity has been launched. This initiative aims to bolster the supply chain of high-quality, sustainable raw materials. As the fashion industry increasingly embraces sustainability, having access to a more eco-friendly, premium raw material base aligns perfectly with the shift towards responsible fashion.

Promoting Sustainable Manufacturing and Circular Economy

The Union Budget's focus on incentives for sustainable manufacturing and circular economy initiatives underscores a growing trend towards environmental responsibility in the fashion industry. The government’s support for circular fashion models, where waste is minimized and products are reused or recycled, is a key move in fostering a greener, more sustainable future for the sector.

Empowering Startups and MSMEs

Another significant budget allocation is the enhancement of credit availability for startups and MSMEs, with a guarantee cover aimed at reducing financial risks. This will provide much-needed support for emerging businesses, enabling them to grow, create jobs, and contribute to India’s economic development. For entrepreneurs in the fashion-tech space, this initiative will empower them to innovate and scale their businesses, further cementing India’s position as a global hub for innovation and conscious consumption.

A Progressive Policy Framework for a Global Innovation Hub

Overall, the Union Budget 2025-26 presents a progressive policy framework that supports startups, fosters innovation, and strengthens sustainability. By focusing on AI, deep-tech, and responsible consumption, the government is laying the foundation for a future where India becomes a global leader in technology-driven innovation and sustainable business practices.

In conclusion, the Union Budget 2025-26 reflects a significant leap toward building a resilient, tech-driven, and environmentally-conscious economy, creating a wealth of opportunities for businesses like VIRGIO and beyond.

- By Mr. Amar Nagaram, Co-Founder & CEO, VIRGIO