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Indian Textile Industry

India is one of the world’s largest producers of textiles and garments. Abundant availability of raw materials such as cotton, wool, silk and jute as well as skilled workforce have made the country a sourcing hub. The Indian textiles industry accounts for about 24 per cent of the world’s spindle capacity and 8 per cent of global rotor capacity. The potential size of the Indian textiles and apparel industry is expected to reach US$ 223 billion by 2021.

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. The sector contributes about 11 percent to industrial production, 14 per cent to the manufacturing sector, 4 percent to the GDP and 12 per cent to the country’s total export earnings. It provides direct employment to over 35 million people, the second largest provider of employment after agriculture. Besides, another 54.85 million people are engaged in its allied activities. The textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the India’s economy.

The fundamental strength of this 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.

Market Size

The Indian textiles 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.

Textiles exports were US$35.32 billion during Apr–Mar, 2014 (Provisional) as compared to US$31.30 billion during corresponding period of the previous year, registering a growth of 12.83 percent. Garment exports from India are expected to touch US$60 billion over the next three years, with the help of government support.

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.6,710.94 crores (US$ 1.11 billion) during April, 2000 to February, 2014.

Government Initiatives

The Government of India has promoted a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under automatic route.

Some of initiatives taken by the government to further promote the industry are as under:

  1. The government has taken a lot of initiatives for the welfare and development of the weavers and the handloom sector. Under revival, reform and restructuring (RRR) package, financial assistance to the tune of Rs.1,019 crore (US$169.66 million) has been approved and the Indian government has released Rs.741 crore (US$ 123.42 million).
  2. Encouraged by turnaround in textiles exports, the Government of India plans to set up a US$60 billion target for the current financial year, a jump of over 30 per cent from the previous financial year.
  3. The Cabinet Committee on Economic Affairs (CCEA) has approved an Integrated Processing Development Scheme (IPDS) with a corpus of Rs 500 crore (US$ 83.28 million) to make textiles processing units more environment-friendly and globally competitive.
  4. The Government of India plans to set up a Rs.100 crore (US$16.62 million) venture capital fund to provide equity support to start-ups in the textiles sector, in order to encourage innovative ideas in this export intensive sector.
  5. The Government of India has allotted Rs.700 crore (US$116.60 million) in the 12th Five Year Plan for the development of technical textiles. In 2012–13, the technical textiles industry reached Rs.7.48 trillion (US$124.60 billion) at an annual growth rate of 3.5 per cent.



The Indian textiles industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand. The industry is expected to reach US$220 billion by 2020.

The Central Silk Board sets targets for raw silk production and encourages farmers and private players to grow silk. To achieve these targets, alliances with the private sector, especially major agro-based industries in pre-cocoon and post-cocoon segments have been encouraged.

For the textiles industry, the proposed hike in FDI limit in multi-brand retail will bring in more players, thereby providing more options to consumers. It will also bring in greater investments along the entire value chain – from agricultural production to final manufactured goods.

With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with several international players having entered the Indian market. The organised apparel segment is expected to grow at a compound annual growth rate (CAGR) of more than 13 per cent over a 10-year period.

References: Ministry of Textiles, Indian Textile Journal, Department of Industrial Policy and Promotion, Press Information Bureau