The Centre has proposed a significant shift in how textile trade violations are handled, moving away from criminal prosecution toward a more business-friendly approach. According to reports from Mint, the textiles ministry has drafted the Textiles Committee (Adjudication of Penalties and Appeal) Rules, 2026, which would replace imprisonment with warnings and monetary penalties for minor violations. The proposed framework aims to reduce criminal liability for business-related lapses and make regulatory enforcement more predictable for textile exporters and manufacturers.
The amendment proposes a structured penalty system that differentiates between first-time offences and repeated violations. As reported by Mint, the rules establish a warning for the first offence and penalties of up to ₹25 lakh for continuing or repeated contraventions. The penalty structure is designed to discourage repeated violations while providing a clear financial disincentive for non-compliance. The Textiles Committee Act, which was framed in 1963, covers textiles and textile machinery that may be prohibited from export or domestic sale if they fail to conform to established standards.
The proposed rules establish a formal adjudication process with specific timelines and procedural safeguards. According to Mint reports, the process begins with a show-cause notice providing 15 days for response, with the adjudicating officer having the authority to grant additional time. The framework includes provisions for formal hearings where individuals can present evidence, and the adjudicating officer must complete inquiries and pass reasoned orders within 180 days of receiving the reply to the show-cause notice. The rules also establish a separate appellate mechanism with a central government-appointed authority of at least joint secretary rank.
The proposed changes carry significant implications for India's substantial textile industry. As reported by Mint, India's textile industry exported merchandise worth ₹35.7 billion in fiscal year 2025-26 and is among the country's most employment-intensive export sectors, accounting for about 8% of merchandise exports. The sector serves as India's second-largest employer after agriculture, providing direct and indirect employment to around 45 million people and supporting the livelihoods of more than 100 million others. Industry stakeholders have welcomed the move, with Raja M. Shanmugam from the Tirupur Exporters' Association noting that the proposed framework could provide greater certainty to businesses facing regulatory action.
The proposed rules are currently in the consultation phase, with stakeholders given 30 days to submit objections and suggestions on the draft rules. According to Mint reports, the Jan Vishwas Act, which came into force in April, forms part of the government's wider effort to decriminalize minor offences and promote ease of doing business. The ministry of textiles has reported no convictions under Section 17(2) of the Textiles Committee Act in the previous five years, supporting the rationale for this regulatory reform. The rules also require electronic communication of orders and publication of adjudicating and appellate authority names on official websites.
