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India Textile Industry

India Textile Industry is one of the leading textile industries in the world. Though was
predominantly unorganized industry even a few years back, but the scenario started
changing after the economic liberalization of Indian economy in 1991. The opening up of
economy gave the much-needed thrust to the Indian textile industry, which has now
successfully become one of the largest in the world.

India textile industry largely depends upon the textile manufacturing and export. It also
plays a major role in the economy of the country. India earns about 27% of its total
foreign exchange through textile exports. Further, the textile industry of India also
contributes nearly 14% of the total industrial production of the country. It also contributes
around 3% to the GDP of the country. India textile industry is also the largest in the
country in terms of employment generation. It not only generates jobs in its own industry,
but also opens up scopes for the other ancillary sectors. India textile industry currently
generates employment to more than 35 million people. It is also estimated that, the
industry will generate 12 million new jobs by the year 2010.

Various Categories

Indian textile industry can be divided into several segments, some of which can be listed
as below:

• Cotton Textiles
• Silk Textiles
• Woolen Textiles
• Readymade Garments
• Hand-crafted Textiles
• Jute and Coir

The Industry

India textile industry is one of the leading in the world. Currently it is estimated to be
around US$ 52 billion and is also projected to be around US$ 115 billion by the year
2012. The current domestic market of textile in India is expected to be increased to US$
60 billion by 2012 from the current US$ 34.6 billion. The textile export of the country
was around US$ 19.14 billion in 2006-07, which saw a stiff rise to reach US$ 22.13 in
2007-08. The share of exports is also expected to increase from 4% to 7% within 2012.
Following are area, production and productivity of cotton in India during the last six
Area in lakh Production in lakh bales of 170 Yield kgs per
hectares kgs hectare

1950-51 56.48 30.62 92

1960-61 76.78 56.41 124

1970-71 76.05 47.63 106

1980-81 78.24 78.60 170

1990-91 74.39 117.00 267

2000-01 85.76 140.00 278

2001-02 87.30 158.00 308

2002-03 76.67 136.00 302

2003-04 76.30 179.00 399

2004-05 87.86 243.00 470

2005-06 86.77 244.00 478

2006-07 91.44 280.00 521

2007-08 94.39 315.00 567

2008-09 93.73 290.00 526

Though during the year 2008-09, the industry had to face adverse agro-climatic
conditions, it succeeded in producing 290 lakh bales of cotton comparing to 315 lakh
bales last year, yet managed to retain its position as world's second highest cotton


• Vast textile production capacity

• Large pool of skilled and cheap work force
• Entrepreneurial skills
• Efficient multi-fiber raw material manufacturing capacity
• Large domestic market
• Enormous export potential
• Very low import content
• Flexible textile manufacturing systems


• Increased global competition in the post 2005 trade regime under WTO
• Imports of cheap textiles from other Asian neighbors
• Use of outdated manufacturing technology
• Poor supply chain management
• Huge unorganized and decentralized sector
• High production cost with respect to other Asian competitors

Cotton Exports from India

Year Quantity (in lakh bales of 170 kgs) Value (in Rs./Crores)

1996-97 16.82 1655.00

1997-98 3.50 313.62

1998-99 1.01 86.72

1999-00 0.65 52.15

2000-01 0.60 51.43

2001-02 0.50 44.40

2002-03 0.83 66.31

2003-04 12.11 1089.15

2004-05 9.14 657.34

2005-06 47.00 3951.35

2006-07 58.00 5267.08

2007-08 85.00 8365.98

2008-09 50.00 N.A.

Year Quantity (in lakh bales of 170 kgs.) Value (Rs./Crores)

1996-97 0.30 56.42

1997-98 4.13 497.93

1998-99 7.87 772.64

1999-00 22.01 1967.92

2000-01 22.13 2029.18

2001-02 25.26 2150.01

2002-03 17.67 1789.92

2003-04 7.21 880.10

2004-05 12.17 1338.04

2005-06 5.00 695.77

2006-07 5.53 752.29

2007-08 6.50 986.33

2008-09 7.00 N.A.

Current Facts on India Textile Industry

• India retained its position as world’s second highest cotton producer.

• Acreage under cotton reduced about 1% during 2008-09.
• The productivity of cotton which was growing up over the years has decreased in
• Substantial increase of Minimum Support Prices (MSPs).
• Cotton exports couldn't pick up owing to disparity in domestic and international
cotton prices.
• Imports of cotton were limited to shortage in supply of Extra Long staple cottons.

Globalization of Indian Textile

The initiation and development of globalization and Indian textile industry took place
simultaneously in the 1990s. The Indian textile industry, until the economic liberalization
of Indian economy was predominantly an unorganized industry. The economic
liberalization of Indian economy in the early 1990s led to stupendous growth of this
Indian industry. The Indian textile industry is one of the largest textile industries in the
world and India earns around 27% of the foreign exchange from exports of textiles and
its related products. Further, globalization of India textile Industry has seen a paradigm
increase in the 'total industrial production' factor of this Industry, which presently stands
at 14%. Furthermore, the contribution of the Indian textile Industry towards the gross
domestic product (GDP) of India is around 3% and the numbers are steadily increasing.
The process of globalization and Indian textile industry development was the effect of
rapid acceptance of 'open market' policy by the developing countries, much in the lines of
the developed countries of the world.
The initiation and its subsequent development of globalization and Indian textile industry
respectively, was effected by the Ministry of Textiles under the Government of India.
The aggressive policy that was undertaken for the rapid development of globalization and
Indian textile industry were really praiseworthy. The most significant step amongst them
was introduction of "The National Textile Policy 2000". This policy envisaged to address
the following issues -
• Increased global competition in the post 2005 trade regime under WTO
• Huge import volume of cheap textiles from other Asian neighbors
• High production cost with respect to other Asian competitors
• Use of outdated manufacturing technology
• Poor supply chain management and huge transit cost
• Huge unorganized and decentralized sector

Further, this policy also aims at increasing the foreign exchange earnings to the tune of
US $ 50 billion by the end of the year 2010. It includes rational projections for the overall
development and promotion of all the sectors involved directly or indirectly with the
Indian textile industry. Furthermore, this policy also envisages the inclusion of the huge
unorganized and decentralized Indian textile sector under the organized textile industry.
This is because the unorganized textile manufacturing sector in India accounts for 76% of
the total textile production.

The globalization of the Indian textile sector was the cumulative effect of the following
factors -

• Huge textile production capacity

• Efficient multi-fiber raw material manufacturing capacity
• Large pool of skilled and cheap work force
• Entrepreneurial skills
• Huge export potential
• Large domestic market
• Very low import content
• Flexible textile manufacturing systems

The Indian textile industry consist of the following sectors -

• Man-made Fiber
• Filament Yarn Industry
• Cotton Textile Industry
• Jute Industry
• Silk and Silk Textile Industry
• Wool & Woolen Industry
• Power loom Sector

An approximate number of textile manufacturing companies operating in India are given

below -

• Badges, emblems ribbons and allied products - 175

• Bed covers, curtains, cushions and other draperies - 2471
• Carpets and rugs - 270
• Embroidery and embroidered garments, made ups and furnishing - 848
• Fabrics and textiles - 3013
• Yarns and threads - 1201
• Jute products - 337
• Kids apparel and garments -1052
• Ladies apparel and garments - 2932
• Men's' apparel and garments - 2936
• Miscellaneous garments, textile and leather accessories - 1658
• Yarns and threads - 1201
• Wool, woolen garments, blankets and accessories - 468
• Textile chemicals, dyeing and finishing chemicals - 239

The overall growth of the Indian textile industry can be attributed to the globalization.
Today, the Indian textile industry employs around 35 million personnel directly and it
accounts for 21% of the total employment generated in the economy. Globalization of the
Indian textile industry has also facilitated introduction of modern and efficient
manufacturing machineries and techniques in the Indian textile sector. Thus, much of
India's economic growth is largely dependent on textile manufacturing and exports.

Role of Textile Industry in India

Role of Textile Industry in India GDP has been quite beneficial in the economic life of
the country. The worldwide trade of textiles and clothing has boosted up the GDP of
India to a great extent as this sector has brought in a huge amount of revenue in the

In the past one year, there has been a massive upsurge in the textile industry of India. The
industry size has expanded from USD 37 billion in 2004-05 to USD 49 billion in 2006-
07. During this era, the local market witnessed a growth of USD 7 billion, that is, from
USD 23 billion to USD 30 billion. The export market increased from USD 14 billion to
USD 19 billion in the same period.

The textile industry is one of the leading sectors in the Indian economy as it contributes
nearly 14 percent to the total industrial production. The textile industry in India is
claimed to be the biggest revenue earners in terms of foreign exchange among all other
industrial sectors in India. This industry provides direct employment to around 35 million
people, which has made it one of the most advantageous industrial sectors in the country.

Some of the important benefits offered by the Indian textile industry are as follows:

• India covers 61 percent of the international textile market

• India covers 22 percent of the global market
• India is known to be the third largest manufacturer of cotton across the globe
• India claims to be the second largest manufacturer as well as provider of cotton
yarn and textiles in the world
• India holds around 25 percent share in the cotton yarn industry across the globe
• India contributes to around 12 percent of the world's production of cotton yarn
and textiles

The Role of Textile Industry in India GDP had been undergoing a moderate increase till
the year 2004 to 2005. But ever since, 2005-06, Indian textiles industry has been
witnessing a robust growth and reached almost USD 17 billion during the same period
from USD 14 billion in 2004-05. At present, Indian textile industry holds 3.5 to 4 percent
share in the total textile production across the globe and 3 percent share in the export
production of clothing. The growth in textile production is predicted to touch USD 19.62
billion during 2006-07. USA is known to be the largest purchaser of Indian textiles.

Following are the statistics calculated as per the contribution of the sectors in Textile
industry in India GDP:

• India holds 22 percent share in the textile market in Europe and 43 percent share
in the apparel market of the country. USA holds 10 percent and 32.6 percent
shares in Indian textiles and apparel.
• Few other global countries apart from USA and Europe, where India has a marked
presence include UAE, Saudi Arabia, Canada, Bangladesh, China, Turkey and
• Ready made garments accounts for 45 percent share holding in the total textile
exports and 8.2 percent in export production of India
• Export production of carpets has witnessed a major growth of 42.23 percent,
which apparently stands at USD 654.32 million during 2004-05 to USD 930.69
million in the year 2006-07. India holds 36 percent share in the global textile
market as has been estimated during April-October 2007
• The technical textiles market in India is assumed to touch USD 10.63 billion by
2007-08 from USD 5.09 billion during 2005-06, which is approximately double.
It is also assumed to touch USD 19.76 billion by the year 2014-15
• By 2010, India is expected to double its share in the international technical textile
• The entire sector of technical textiles is estimated to reach USD 29 billion during

The Role of Textile Industry in India GDP also includes a hike in the investment flow
both in the domestic market and the export production of textiles. The investment range
in the Indian textile industry has increased from USD 2.94 billion to USD 7.85 billion
within three years, from 2004 to 2007. It has been assumed that by the year 2012, the
investment ratio in textile industry is most likely to touch USD 38.14 billion.

FDI Inflows to Textiles

FDI Inflows to Textiles industry in India enhanced the growth of the sector. India has
been known for its textiles all over the world. The textile industry is concentrated in the
western belt of the country, mainly in the state of Gujarat and Maharashtra. Ahmedabad,
in Gujarat is called the 'Manchester of India', after a place which was famous for its
textile mills.

Indian textiles industry-At a glance

The Indian textiles industry is a highly established sector. The advantages of the Indian
Textile industry are fully equipped manufacturing units, vast multi-fiber raw material
base, advanced designing capabilities, highly skilled and effective human resources.

In the future, India has good scope of becoming the global textile and apparel sourcing
center. The Indian textiles sourcing market is expected to grow at the rate of 12% per
year. The market value is US$ 22-25 billion which is expected to grow to US$ 35-37
billion by the year 2011.

FDI Inflows to Textiles-Facts

• The textiles industry in India is experiencing an increase in the collaboration

between national and international companies International apparel companies
like Hugo Boss, Liz Claiborne, Diesel, Ahlstorm, Kanz, Baird McNutt, etc have
already started their operations in India and these companies are trying to increase
it to a considerable level

• National and the international companies that are involved in collaborations

include Rajasthan Spinning & Weaving Mills, Armani, Raymond, Levi Strauss,
De Witte Lietaer, Barbara, Jockey, Vardhman Group, Gokaldas, Vincenzo
Zucchi, Arvind brands, Benetton, Esprit, Marzotto, Welspun, etc

FDI Inflows to Textiles-Government Initiatives

• Foreign Direct Investments (FDI) up to 100% is allowed in this sector through the
automatic route by the Reserve Bank of India
• In order to provide quality cotton raw materials at reasonable price to the
manufacturers, the Technology Mission on Cotton was launched
• In order to facilitate the technological advancement in the textile industry, the
Technology Upgradation Fund Scheme (TUFS) was set up.
• The Scheme for Integrated Textile Park (SITP) is set up to provide world standard
infrastructure facilities
• The reservations for the small scaled units in textiles were abolished