Textile Industry in India

The textile industry in India is one of the oldest and most significant sectors of the country’s economy, both historically and in contemporary times. It occupies a vital position in the national industrial framework, contributing substantially to industrial production, employment, and exports. Known for its rich heritage of handlooms, handicrafts, and diverse textile traditions, the industry also represents a dynamic modern sector encompassing large-scale mills, powerlooms, and apparel manufacturing units that serve global markets.

Historical Background

The roots of India’s textile industry date back several millennia. Ancient civilisations such as those of the Indus Valley (circa 2500 BCE) were already engaged in spinning, weaving, and dyeing fabrics. Cotton textiles from India were prized commodities in ancient trade, reaching regions such as Egypt, Rome, China, and Southeast Asia.
During the medieval period, cities like Varanasi, Surat, Madurai, and Dhaka became renowned centres of fine textiles, particularly muslin, silk, and brocade. Indian textiles dominated global trade until the advent of European colonial powers.
Under British rule, however, the industry suffered severe setbacks. The colonial administration promoted the import of British-manufactured textiles while suppressing indigenous production. Traditional weavers faced economic ruin, though a modern textile industry began emerging in the mid-19th century with the establishment of cotton mills in Bombay (Mumbai) and Ahmedabad, laying the foundation for industrial-scale textile manufacturing in India.
After independence in 1947, India sought to revive and modernise the sector through industrial policy, technological development, and institutional support.

Structure of the Textile Industry

The Indian textile industry is a highly diverse and decentralised sector, characterised by its combination of traditional hand production and modern factory-based manufacturing. Broadly, it comprises the following segments:

1. Cotton Textiles:
   • The largest segment, accounting for more than half of the total textile output.
   • Includes spinning, weaving, and garmenting.
   • Major centres: Mumbai, Ahmedabad, Coimbatore, Surat, and Nagpur.
2. Silk Industry:
   • India is the second-largest producer of silk in the world, producing all four varieties—mulberry, eri, tasar, and muga.
   • Important states: Karnataka, West Bengal, Tamil Nadu, and Assam.
3. Woollen Textiles:
   • Concentrated in Punjab, Haryana, Rajasthan, and Uttar Pradesh.
   • Known for blankets, shawls, and carpets (notably the Kashmir and Bhadohi carpets).
4. Jute Industry:
   • India is the world’s largest producer of jute, with West Bengal as the principal hub.
   • Major products include sacks, mats, ropes, and eco-friendly packaging materials.
5. Man-made Fibre and Synthetic Textiles:
   • Includes polyester, viscose, nylon, and acrylic fibre industries.
   • Maharashtra, Gujarat, and Tamil Nadu are major production centres.
6. Handloom and Handicraft Sector:
   • Represents India’s traditional weaving communities and artisans.
   • Provides employment to millions, particularly in rural areas.
   • Prominent clusters: Varanasi (Brocades), Pochampally (Ikat), Kanchipuram (Silk), and Bhagalpur (Tussar).

This structural diversity enables the industry to cater to a wide range of domestic and international markets.

Importance to the Indian Economy

The textile industry plays a crucial role in India’s economic development:

• Employment Generation: Provides direct employment to over 45 million people and indirect employment to about 100 million, making it the second-largest employer after agriculture.
• Contribution to GDP: Contributes around 2–3% to India’s GDP and over 12% to industrial output.
• Export Earnings: Accounts for approximately 10–12% of India’s total exports, with key destinations including the United States, European Union, and Middle Eastern countries.
• Rural Livelihoods: Supports rural artisans and women workers through handloom, handicraft, and cottage-based industries.

Government Policies and Initiatives

The Government of India has implemented several initiatives to promote the textile sector’s growth, competitiveness, and sustainability:

• National Textile Policy (2000): Aimed at developing a globally competitive textile industry by modernising infrastructure and ensuring quality improvement.
• Technology Upgradation Fund Scheme (TUFS): Provides financial assistance to textile units for adopting modern technology and machinery.
• Integrated Textile Parks Scheme: Establishes Integrated Textile Parks (ITPs) with state-of-the-art facilities to promote cluster-based industrial growth.
• Amended Technology Upgradation Fund (ATUFS): Introduced to boost capital investment and employment generation in the sector.
• Scheme for Integrated Textile Parks (SITP): Encourages infrastructure development in textile clusters.
• Production Linked Incentive (PLI) Scheme for Textiles (2021): Focuses on promoting high-value man-made fibre and technical textiles.
• National Handloom Development Programme and Handicrafts Cluster Development Scheme: Support artisans and traditional weavers through design, marketing, and financial assistance.

Major Textile Centres in India

The textile industry is geographically concentrated in specific states and cities that have developed strong manufacturing ecosystems:

• Maharashtra: Mumbai, Solapur, and Ichalkaranji – centres for cotton textiles.
• Gujarat: Ahmedabad and Surat – known for cotton, synthetic, and man-made fibres.
• Tamil Nadu: Coimbatore, Erode, and Tirupur – major hubs for knitwear and spinning.
• Punjab: Ludhiana – famous for woollen and hosiery goods.
• West Bengal: Kolkata and Howrah – centres for jute and diversified textiles.
• Uttar Pradesh and Bihar: Noted for handlooms, silks, and carpets.

Challenges Facing the Industry

Despite its strong base, the textile industry faces several structural and operational challenges:

• Obsolete Technology: Many units, particularly in the small-scale and handloom sectors, still use outdated machinery.
• Fragmentation: The industry remains highly unorganised, leading to inefficiencies and lack of scale.
• Competition: Intense global competition from countries like Bangladesh, Vietnam, and China in apparel exports.
• Raw Material Issues: Fluctuations in cotton and synthetic fibre prices affect production costs.
• Labour and Skill Shortages: The need for skilled workers and training remains a major concern.
• Environmental Compliance: Pollution from dyeing and finishing units poses ecological challenges.
• Logistics and Infrastructure Bottlenecks: Limited modern infrastructure increases production and transport costs.

Opportunities and Future Prospects

The Indian textile industry possesses vast growth potential due to its resource base, skilled workforce, and expanding global market. Emerging opportunities include:

• Technical Textiles: Growing demand for industrial, medical, and defence-related fabrics.
• Sustainable and Eco-friendly Textiles: Increasing global preference for organic cotton and green manufacturing.
• Digital Transformation: Adoption of automation, e-commerce platforms, and smart supply-chain technologies.
• Export Expansion: Rising global demand and government incentives under the PLI scheme to boost competitiveness.
• Domestic Consumption: A growing middle class and fashion-conscious youth driving demand for branded apparel.

Significance in Global Trade

India is one of the world’s largest textile exporters, ranking among the top three global producers of cotton and man-made fibres. It exports to over 150 countries, supplying raw materials, yarns, fabrics, and finished garments. The country’s comparative advantage lies in abundant raw materials, low labour costs, and a diverse product base ranging from high-end fashion to traditional crafts.