India proposes fines, not jail, for minor textile trade violations

The central government has proposed decriminalising minor textile trade violations, replacing potential jail terms with warnings and monetary penalties. The draft Textiles Committee (Adjudication of Penalties and Appeal) Rules, 2026, outlines a time-bound adjudication mechanism for breaches under the Textiles Committee Act, aiming to improve ease of doing business.

Under the proposed rules, first-time violations like flouting orders prohibiting export or domestic sale of specified textiles or machinery would attract a warning. Continuing or repeated contraventions could draw a penalty of up to Rs 25 lakh. The process would start with a show-cause notice, and the person facing action would have 15 days to reply, with a possible extension. The adjudicating officer must pass a reasoned order within 180 days.

The textiles sector exported goods worth $35.7 billion in FY25-26 and is India's second-largest employer after agriculture, supporting around 45 million direct and indirect jobs. Stakeholders have 30 days to submit objections on the draft rules. Exporters have welcomed the move for providing greater certainty in regulatory actions.