Cotton Textile Industries in India

Textile industry contributes 14% to industrial production and 4 per cent to GDP. With employment to 45 million people, textile industry is one of the largest source of employment generation in the country. The industry accounts for nearly 13 per cent of total export earnings of India.

Historical Bits

First Cotton Mill of India

Bowreah Cotton Mills was India’s first cotton cloth mill, established in 1818 by British at Fort Gloster, located 15 miles south of Calcutta. However, this mill was a failure. The true foundation of India’s modern cotton cloth industry was established when KGN Daber established Bombay Spinning and weaving Company in 1854. The first cotton mill of Ahmadabad was established in 1861. In due course of time, Mumbai and Ahmadabad emerged as two rival centres of cotton textiles in India.

Impact of Partition on Cotton Industry

Partition of India in 1947 affected Indian cotton industry badly. Out of 423 textile mills of the undivided India, India received 409 after partition and the remaining 14 went to Pakistan. However, most of the weavers (who were Muslims) migrated to Pakistan. Further, a large part of cotton producing area also went to Pakistan. Due to this, India was forced to import raw cotton to keep the mills alive.

India’s position in Textile sector

India accounts for about 14% of the world’s production of textile fibre and yarn. Currently, India is 1st in terms of Jute production, 2nd in terms of textile manufacture and 2nd in terms of production of silk and cotton. India has 63% share in global textile and garment market. Further, India also has second largest manufacturing capacity globally. The Indian textile industry accounts for about 24% of the world’s spindle capacity and 8% of global rotor capacity. India also has the highest loom capacity (including hand looms)  with 63% of the world’s market share.

Currently, there are around 1000 cotton mills in India. In India the cotton and manmade fibre industry is concentrated mainly in Maharastra, Tamil nadu and Gujarat.

Growth Drivers of Textile Industry

The key drivers for textile industry include rising per capita income and changes in preference for cloths; huge domestic demand and favourable government policy support.

Government Policy in Textile Industry

Technology Upgradation Fund Scheme (TUFS)

The government had launched a Technology Upgradation Fund Scheme in 1999 to provide easy access to capital for technological upgradation in the textile sector. It is an “interest subsidy” scheme that provides for reimbursement of 5% out of interest actually charged by the lending agencies for facilitating investment in modernization of Textiles Jute Industries. The scheme is being operated through nodal agencies (IDBI,SIDBI,IFCI and major nationalized banks). Current Government is planning to restructure this scheme, making it industry friendly.

Technology Mission on Cotton

Technology Mission on Cotton (TMC) was launched in 2000 with four mini-missions in its ambit viz. Cotton Research & Technology Generation; Transfer of Technology & Development; Development of Market Infrastructure and Modernization / Setting up of new G&P (ginning & pressing) factories to give a total makeover to the cotton industry.

National Textile Policy

Government of India had earlier launched a National Textile Policy in 1985 and then 2000 to increase textile and apparel exports and pay focussed attention to the textile sector including cotton, silk, jute and woollen textiles. Currently, the NDA government is in the process of finalizing new Textile Policy which would aim to achieve USD 300 billion textiles exports by 2024-25 and creation of additional 35 million jobs. In this context, the Ajay Shankar Committee was established to review the 2000 policy and suggest framework for new NTP.

Scheme for Integrated Textile Parks

This policy provides world class infrastructure to new textile units. As of now, some 57 Textile Parks have been sanctioned. By 2017, 25 more Textile Parks are to be sanctioned.

Further, the Budget 2014-15 also provided for Rs. 200 crore to set up mega textile clusters at Bareilly, Lucknow, Surat, Kuttch, Bhagalpur and Mysore and one in Tamil Nadu.