India Decriminalizes Minor Textile Violations

The Indian government is set to decriminalize minor violations within the textile trade, shifting from criminal prosecution to a system of warnings and monetary penalties. This initiative, detailed in the draft Textiles Committee (Adjudication of Penalties and Appeal) Rules, 2026, aims to improve the ease of doing business for textile manufacturers and exporters.

Under the proposed amendments, offenses like prohibiting the export or domestic sale of specific textiles would initially receive a warning. Continued or repeated violations could incur penalties of up to ₹25 lakh. This process involves a show-cause notice, a 15-day response period for the accused, and a final reasoned order within 180 days by an adjudicating officer.

The significant textile industry, which exported $35.7 billion in FY2025-26 and employs millions, stands to benefit from this regulatory reform. The proposed rules also establish an appellate mechanism, allowing aggrieved parties to appeal decisions to a government-appointed authority.

Stakeholders have a 30-day window to submit objections and suggestions on the draft rules. This reform aligns with the broader governmental effort to reduce criminal liability for business-related lapses, as seen in the Jan Vishwas Act.