India’s textile potential has evolved and grown over time and its richness and diversity have surpassed national boundaries. India is famous & proud of its rich textile heritage, ranging from fine, traditional handloom and handicrafts to the fabrics manufactured in capital intensive factories.

The Indian textile industry is critical to the country’s economic prosperity and has a direct impact on the lives of 45 million people.

The textile and clothing business in India today is characterised by radical innovation, shifting markets, evolving supply chains, and distribution methods which is increasingly moving towards responsible and sustainable manufacturing. 

This business has enormous potential to increase its share by 5% in the global trade in the next five years. India’s strengths are traditional textiles and natural fibres, where it is the world’s largest producer of cotton and the second-largest producer of polyester and silk.

Growth of Textile Industry

India has already been independent for more than 50 years. The growth pattern of the different industries during the last five decades of the post-independence era demonstrates that the industry grew gradually during the first two decades after independence, though at a slower pace, and then slowed significantly during the third decade.


Following that, growth accelerated dramatically in every sector of the industry during the fourth decade. However, its expansion peaked in the fifth decade, or the last ten years, particularly in the 1990s.

In reality, the Textile Policy of 1985 and the Economic Policy of 1991, geared towards economic and trade liberalisation, spurred growth in the 1990s. During this time, the spinning business and the manufactured fibre industry in the organised and decentralised weaving sectors led to development.


In recent years, worldwide commerce in textiles and apparel has shown a constant increase. Since 2005, the global textile and clothing trade has increased at a CAGR of 4%, reaching $823 billion in 2018. 

The largest traded category in the sector was apparel, which accounted for 57% of total textile and apparel commerce. Since 2005, exports in this category have grown at a 4% compound annual growth rate (CAGR). 

An overview of the domestic situation.

India’s domestic textile and apparel market is worth more than $100 billion in 2018-19, and it is predicted to increase at 12% CAGR to $223 billion by 2021. Apparel demand in India is presently valued at $78 billion, with the domestic market accounting for over 74% of the total textile and apparel industry.


Technical textiles, one of the fastest-growing sub-segments has seen a significant increase with a CAGR of 12%



  • India has a large supply of textile industry raw materials. It is one of the world’s leading cotton producers and has a rich source of other fibres such as polyester, silk, and viscose.
  • India has a large pool of highly skilled workers. Due to lower wage rates, the country has a significant edge. Because of low labour costs, manufacturing costs are naturally reduced to extremely low levels.
  • With a presence in practically every step of the value chain, India is a strong competitor in the spinning business.
  • The scale, production facilities, type of garments produced, quantity and quality of output, pricing, and fabric requirements of the Indian garment industry are all quite variable.



  • Knitted clothing production has remained a highly fragmented business. Global players prefer to get their requirements from two or three vendors, making it harder for Indian garment manufacturers to meet capacity demands.
  • Some ancient laws, like the SSI domain for knitted clothes, continue to affect the industry.
  • In comparison to other competing countries, the labour force produces low productivity.
  • Despite safeguards like TUFS, technology obsolescence persists. The Technology Upgradation Fund Scheme (TUFS) was introduced by the Government in 1999 to facilitate new and appropriate technology for making the textile industry globally competitive and to reduce the capital cost for the textile industry.)
  • In a market dominated by customers, negotiating power is limited.
  • India severely lacks trade treaty membership, resulting in limited access to other key markets.
  • Indian labour regulations are relatively hostile to trades, and labour reforms are urgently needed in India.

Government measures to strengthen the textile sector in India:


  • Technology Mission on Cotton (TMC)
  • Technology Upgradation fund Scheme (TUFS)
  • Setting up of Apparel Training and Design Centres (ATDCs)
  • 100 percent Foreign Direct Investment (FDI) in the textile sector under automatic route.
  • Setting up two design centres in Gujarat in collaboration with the National Institute of Fashion Technology.
  • Setting up a Handloom Plaza in Ahmedabad with an estimated investment of US$ 24.6 million.
  • Revival plans of the mills run by National Textiles Corporation (NTC). Already, for the revival of 18 textile mills, US$ 2.21 million worth of machinery has been ordered for the upgradation and modernisation of these mills.
  • Setting up a handloom mall with an investment of US$ 24.6 million at Jehangir Mill in Ahmedabad.
  • Scrapping of the Textile Committee cess being collected from the textile and textile machinery industry under the Textile Committee Act.

India’s Textile and Apparel Industry’s Response to COVID-19


Covid-19 has wreaked havoc on the global textile and apparel industry, notably in India. The virus’s spread has far-reaching repercussions. Businesses have begun to feel the effects of uncertainty in demand, supply chain interruptions, and a spike in raw material costs, all of which impacted workers’ livelihoods.

According to predictions, the Indian textile and clothing industry will be slow for the next 12-15 months, resulting in a Global market size reduction of 30% in FY21.

Get a Free Marketing Consultation