Industry Odisha Bureau, Aug 24: India is shifting approach toward regulating minor textile trade violations through administrative action. The Centre has proposed replacing criminal prosecution and imprisonment with warnings and monetary penalties. The draft Textiles Committee (Adjudication of Penalties and Appeal) Rules, 2026 establishes this new regulatory framework. The proposal forms part of India’s broader effort to improve ease of doing business. Stakeholders have been given thirty days to submit objections and suggestions regarding proposed rules.
The regulatory change specifically targets violations of government orders prohibiting prohibited textile exports. Prohibited orders concerning specified textile machinery sales would also fall under new provisions. A warning applies to first-time offences under the proposed decriminalisation framework. Continuing or repeated contraventions can attract monetary penalties of up to twenty-five lakh rupees. This replaces earlier criminal prosecution routes that exposed businesses to potential imprisonment consequences.
The proposed adjudication process begins with issuance of a show-cause notice formally. The notice sets out the alleged contravention, relevant provisions, and supporting evidence. The person facing action receives fifteen days from receipt to submit responses. Adjudicating officers can grant additional response time with recorded written reasons. After receiving responses, the officer conducts formal hearings allowing personal or representative appearances. The officer must complete proceedings and issue reasoned orders within one hundred eighty days.
The adjudicating officer considers the violation’s nature, gravity, and whether it repeats. Mitigating circumstances and any proven losses or damages factor into penalty determination. A separate appellate mechanism allows aggrieved persons to challenge adjudication decisions. The appellate authority must hold rank of at least joint secretary. Appeals can be filed physically, by registered post, or through electronic means. The appellate authority retains power to confirm, modify, or set aside orders.
India’s textile industry exported approximately thirty-five point seven billion dollars merchandise. This represented approximately eight percent of India’s total merchandise exports during fiscal year. The sector provides direct and indirect employment to approximately forty-five million people. Over one hundred million additional people depend on textile sector livelihoods nationwide. The Textiles Committee Act, established in nineteen sixty-three, ensures quality standards. The framework covers cotton, woollen, blended fabrics, yarn, and readymade garments.
The proposed regulatory shift could improve predictability for textile exporters and manufacturers. Decriminalisation does not mean deregulation but rather proportionate enforcement mechanisms instead. Businesses would still face compliance requirements, inspections, and financial penalties. However, replacing imprisonment with administrative procedures may reduce compliance uncertainty substantially. A parliamentary panel reviewing Jan Vishwas legislation noted no prior convictions. No convictions had been recorded under relevant sections during previous five years. This suggests criminal prosecution rarely occurred despite available legal provisions existing.
For textile businesses, the reformed framework could provide greater regulatory clarity. Businesses can anticipate proportionate consequences rather than facing extreme criminal liability. This regulatory transparency may support investment decisions and compliance cost planning. The change reflects India’s recognition that minor business violations warrant administrative, not criminal, responses.
