An Overview of Indian Textile Industry

An Overview of Indian Textile Industry

R.S. Balakumar
Associate Professor
Dept of Fashion Design & Arts
Hindustan University, Chennai, India


Indian textile industry is the second largest producer of textiles in the world with a massive raw material and textiles manufacturing base. This industry accounts for almost 24% of the world’s spindle capacity and 8% of global rotor capacity. Abundant availability of raw materials such as cotton, wool, silk and jute as well as skilled workforce have made the country a sourcing hub. Economy of India is largely dependent on the textile manufacturing and trade in addition to other major industries. India ranked 2nd in textile export with 6% of global share and stood 5th in apparel export with 4% of global share. Indian textile industry is one of the largest contributors to the country’s exports with around 11.4% share in India’s total export earnings for the fiscal period ended 2018-19 valuing to nearly USD 37.5 billion (INR 2,596 billion) and growing at a CAGR of 7% since 2004-05. Despite the large share in the global market and contribution of 2.3% of the Indian GDP.

Indian textile industry
Fig: Indian textile industry

The textiles industry has made a major contribution to the national economy in terms of direct and indirect employment generation and net foreign exchange earnings. It provides direct employment to over 45 million people. The textiles sector is the second largest provider of employment after agriculture. Thus, growth and all-round development of this industry has a direct bearing on the improvement of the India’s economy.

The Indian textile industry is set for strong growth, buoyed by strong domestic consumption as well as export demand.

The most significant change in the Indian textiles industry has been the advent of man-made fibres (MMF). India has successfully placed its innovative range of MMF textiles in almost all the countries across the globe. MMF production recorded an increase of 10 per cent and filament yarn production grew by 6 per cent in the month of February 2014. MMF production increased by about 4 per cent during the period April 2013–February 2014.

Cotton yarn production increased by about 10 per cent during February 2014 and by about 10 per cent during April 2013–February 2014. Blended and 100 per cent non-cotton yarn production increased by 6 per cent during February 2014 and by 8 per cent during the period April 2013–February 2014.

Cloth production by mill sector registered a growth of 9 per cent in the month of February 2014 and of 6 per cent during April 2013–February 2014.

Cloth production by power loom and hosiery increased by 2 per cent and 9 per cent, respectively, during February 2014. The total cloth production grew by 4 per cent during February 2014 and by 3 per cent during the period April 2013–February 2014.

Textiles exports stood at US$ 28.53 billion during April 2013–January 2014 as compared to US$ 24.90 billion during the corresponding period of the previous year, registering a growth of 14.58 per cent. Garment exports from India is expected to touch US$ 60 billion over the next three years, with the help of government support, said Dr. A Sakthivel, Chairman, Apparel Export Promotion Council (AEPC).

The textiles sector has witnessed a spurt in investment during the last five years. The industry (including dyed and printed) attracted foreign direct investment (FDI) worth Rs 6,710.94crore (US$ 1.11 billion) during April 2000 to February 2014.

The fundamental strength of the textile industry flows from its strong production base of wide range of fibres / yarns from natural fibres like cotton, jute, silk and wool to synthetic /man-made fibres like polyester, viscose, nylon and acrylic. We can just track the strong multi-fibre strong base by highlighting the following important positions reckon by this industry across globe are:

  • Cotton – Second largest cotton and cellulosic fibres producing country in the world.
  • Silk – India is the second largest producer of silk and contributes about 18% to the total world raw silk production.
  • Wool –India has 3rd largest sheep population in the world, having 6.15 crores sheep, producing 45 million kg of raw wool, and accounting for 3.1% of total world wool production. India ranks 6th amongst clean wool producer countries and 9th amongst greasy wool producers.
  • Man-Made Fibres– the fourth largest in synthetic fibres/yarns globally.
  • Jute – India is the largest producer and second largest exporter of the jute goods.

Five Important Factors Favoring Growth of the Indian Textile Industry:

  1. Raw material base: India has high self- sufficiency for raw material particularly natural fibres. India’s cotton crop is the third largest in the world. Indian textile Industry produces and handles all types of fibres.
  2. Labour: Cheap labour and strong entrepreneurial skills have always been the backbone of the Indian textile Industry.
  3. Flexibility: The small size of manufacturing which is predominant in the apparel industry allows for greater flexibility to service smaller and specialized orders.
  4. Rich Heritage: The cultural diversity and rich heritage of the country offers good inspiration base for designers.
  5. Domestic market: Natural demand drivers including rising income levels, increasing urbanization and growth of the purchasing population drive domestic demand.

A Scenario of the Indian Textile Industry:
India has been well known for her textile goods since very ancient times. The traditional textile industry of India was virtually decayed during the colonial regime. However, the modern textile industry took birth in India in the early nineteenth century when the first textile mill in the country was established at fort gloater near Calcutta in 1818. The cotton textile industry, however, made its real beginning in Bombay, in 1850s. The first cotton textile mill of Bombay was established in 1854 by a Parsi cotton merchant then engaged in overseas and internal trade. Indeed, the vast majority of the early mills were the handiwork of Parsi merchants engaged in yarn and cloth trade at home and Chinese and African markets.

The first cotton mill in Ahmedabad, which was eventually to emerge as a rival Centre to Bombay, was established in 1861. The spread of the textile industry to Ahmedabad was largely due to the Gujarati trading class.

The cotton textile industry made rapid progress in the second half of the nineteenth century and by the end of the century there were 178 cotton textile mills; but during the year 1900 the cotton textile industry was in bad state due to the great famine and a number of mills of Bombay and Ahmedabad were to be closed down for long periods.

Present Situation of the Textile Industry in India

monthly export data of indian textile industry

  • Textile constitutes the single largest industry in India.
  • The segment of the industry during the year 2000-01 has been positive.
  • The production of cotton declined from 156 lakh bales in 1999-2000 to 1.40 lakh bales during 2000-01.
  • Production of man-made fibre increased from 835 million kgs in 1999-2000 to 904 million kgs during the year 2000-01 registering a growth of 8.26%.
  • The production of spun yarn increased to 3160 million kgs during 2000-01 from 3046 million kgs during 1999-2000 registering a growth of 3.7%.
  • The production of man-made filament yarn registered a growth of 2.91% during the year 1999-2000 increasing from 894 million kgs to 920 million kgs.
  • The production of fabric registered a growth of 2.7% during the year 1999-2000 increasing from 39,208 million sq mtrs to 40,256 million sq mtrs.
  • The production of mill sector declined by 2.6% while production of handloom, power loom and hosiery sector increased by 2%, 2.7% and 5.1% respectively.
  • The exports of textiles and garments increased from Rs. 455048 million to Rs. 552424 million, registering a growth of 21%.
  • Growth in the textile industry in the year 2003-2004 was Rs. 1609 billion.
  • And during 2004-05 production of fabrics touched a peak of 45,378 million square meters.
  • In the year 2005-06 up to November, production of fabric.

Indian Government Focused on the Textile Industry:
At present, the only scheme through which Government can assist the industry is the Technology Up gradation Fund Scheme (TUFS) which provides for reimbursing 5% interest on the loans/finance raised from designated financial institutions for bench marked projects of modernization. IDBI, SIDBI, IFCI have been designed as nodal agencies for large and medium small-scale industry and jute industry respectively. They have co-opted 148 leading commercial banks/cooperative banks and financial institutions like State Finance Corporations and State Industrial Development Corporation etc.

Scheme for Integrated Textile Parks (SITP)
To provide the industry with world-class infrastructure facilities for setting up their textile units, Government has launched the Scheme for Integrated Textile Parks (SITP) by merging the Scheme for Apparel Parks for Exports (APE) and Textile Centre Infrastructure Development Scheme (TCIDS). This scheme is based on Public-Private Partnership (PPP) and envisages engaging of a professional agency for project execution. The Ministry of Textiles (MOT) would implement the Scheme through Special Purpose Vehicles (SPVs).

National Textile Corporation Ltd. (NTC)
National Textile Corporation Ltd. (NTC) is the single largest Textile Central Public Sector Enterprise under Ministry of Textiles managing 52 Textile Mills through its 9 Subsidiary Companies spread all over India. The headquarters of the Holding Company is at New Delhi. The strength of the group is around 22000 employees. The annual turnover of the Company in the year 2004-05 was approximately Rs.638 crores having capacity of 11 lakhs Spindles, 1500 Looms producing 450 lakh Kgs of Yarn and 185 lakh Mtrs of cloth annually.

Cotton Corporation Of India Ltd. (CCI)
The Cotton Corporation of India Ltd (CCI), Mumbai, is a profit-making Public Sector Undertaking under the Ministry of Textiles engaged in commercial trading of cotton. The CCI also undertakes Minimum Support Price Operation (MSP) on behalf of the Government of India.

The Ministry of Textiles
The Ministry of Textiles is responsible for policy formulation, planning, and development export promotion and trade regulation in respect of the textile sector. This included all natural and manmade cellulosic fibers that go into the making of textiles, clothing and handicrafts.

The Indian textile industry is at present is one of the largest and most important sectors in the economy in terms of output foreign exchange earnings and employment in India. The Textile industry has the enriched potential to scale new height in the globalized economy.

The textile industry in India has gone through significant charges in anticipation of increased international competition. The industry is facing numerous problems and among them the most important once are those of liquidity for many organized sector units, demand recession and insufficient price realization. The long-range problems include the need for sufficient modernization and restructuring of the entire industry to cater more effectively to the demands of the domestic and foreign markets for textiles as per the needs of today and tomorrow. Bricks re gistered a further growth of 9 percent over the corresponding period of the previous year.


  1. Ruddar Datt, K.P.M. Sundharam, Indian Economy p 658, S.Chand & Company Ltd, New Delhi ,2006
  2. P.J. Divatia, Indian Industries in the 21st Century p46, Deep & Deep Publications Pvt Ltd, New Delhi, 2003
  3. Article published Related to Indian textile industry in THE HINDU-ENGLISH NEWS PAPER.

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