New Delhi: The Centre plans to decriminalize minor textile trade violations, replacing jail terms with fines as the government seeks to improve the ease of doing business in the country.
The Centre has proposed a time-bound adjudication mechanism for violations under the Textiles Committee Act as part of its broader push to reduce criminal liability for business-related lapses and make regulatory enforcement more predictable for textile exporters and manufacturers, according to two government officials and a document reviewed by Mint.
According to the draft Textiles Committee (Adjudication of Penalties and Appeal) Rules, 2026, reviewed by Mint, the textiles ministry has proposed a formal process under which violations would be dealt with through warnings and monetary penalties instead of the earlier criminal prosecution route. Stakeholders have been given 30 days to submit objections and suggestions on the draft rules.
The amendment proposes replacing imprisonment for flouting orders prohibiting the export or domestic sale of specified textiles or textile machinery with a warning for the first offence and a penalty of up to ₹25 lakh continuing or repeated contraventions. The Jan Vishwas Act, which came into force in April, is part of the government’s wider effort to decriminalize minor offences and promote the ease of doing business.
“The process will begin with a show-cause notice setting out the nature of the alleged contravention, the provisions involved, the material relied upon and the period for submitting a response,” said the first of the two government officials cited above, who both spoke on condition of anonymity.
“The person facing action will have 15 days from receipt of the notice to submit a reply along with supporting documents. The adjudicating officer can grant additional time for responding, with reasons recorded in writing,” the official added.
Queries emailed to the spokesperson for the textiles ministry remained unanswered till press time.
The Textiles Committee Act was framed in 1963 to ensure quality of textiles and textile machinery in India for both domestic consumption and export markets. The rules apply to textiles or textile machinery that the government may prohibit from export or domestic sale if they fail to conform to the standards established, adopted or recognized by India’s Textiles Committee. The committee’s inspection framework covers a range of products, including cotton, woollen, man-made and blended fabrics; cotton and woollen yarn; made-ups such as towels, bedsheets and handkerchiefs; and readymade garments.
The proposed rule change assumes significance for India’s textile industry, which exported merchandise worth $35.7 billion in fiscal year 2025-26, is among the country’s most employment-intensive export sectors, and accounts for about 8% of merchandise exports. The textiles sector is 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.
The proposed new rules also provide for a formal hearing before a penalty is imposed. The person concerned can appear personally or through an authorized representative and can submit oral or documentary evidence relevant to the inquiry, the draft of the legislative amendment said.
The adjudicating officer will have to complete the inquiry and pass a reasoned order within 180 days from receipt of the reply to the show-cause notice, or from the expiry of the prescribed response period, if no reply is received. The order can close the proceedings where no contravention is established, issue a warning or impose a penalty. While deciding the quantum of penalty, the officer may consider the nature and gravity of the violation, whether it is a first, repeated or continuing contravention, the extent of any loss or damage, mitigating circumstances and other relevant factors, the draft said.
Exporters welcomed the move. “The proposed 15-day response period, right to a hearing, evidence-based adjudication and a 180-day timeline could provide greater certainty to businesses facing regulatory action,” said Raja M. Shanmugam, former president of the Tirupur Exporters’ Association.
The proposed framework also creates a separate appellate mechanism. The central government will appoint an appellate authority of at least the rank of joint secretary. A person aggrieved by an adjudication order can appeal within the period prescribed under the amended law. Appeals can be filed in person, by registered or speed post or through electronic means. The appellate authority will have the power to confirm, modify or set aside the order of the adjudicating officer and will be required to issue a reasoned decision.
The proposed rules also provide for electronic communication of orders and require the government or the Textiles Committee to publish the names and designations of the adjudicating and appellate authorities on its official website.
In its report on the Jan Vishwas (Amendment of Provisions) Bill, 2025, a parliamentary panel recorded the ministry of textiles’ submission that no convictions had been reported in the previous five years under Section 17(2) of the Textiles Committee Act, which provides for punishment for violating government orders prohibiting the export or domestic sale of specified textiles or textile machinery.