Indian textile industry is the second largest in the
world. Here is a brief profile of textile sector in India.
Textile Industry in India
Textile Industry in India is the second largest employment generator
after agriculture. It holds significant status in India as it provides
one of the most fundamental necessities of the people. Textile industry
was one of the earliest industries to come into existence in India and
it accounts for more than 30% of the total exports. In fact Indian
textile industry is the second largest in the world, second only to
Textile Industry is unique in the terms that it is an independent
industry, from the basic requirement of raw materials to the final
products, with huge value-addition at every stage of processing. Textile
industry in India has vast potential for creation of employment
opportunities in the agricultural, industrial, organised and
decentralised sectors & rural and urban areas, particularly for
women and the disadvantaged. Indian textile industry is constituted of
the following segments: Readymade Garments, Cotton Textiles including
Handlooms, Man-made Textiles, Silk Textiles, Woollen Textiles,
Handicrafts, Coir, and Jute.
Till the year 1985, development of textile sector in India took place
in terms of general policies. In 1985, for the first time the importance
of textile sector was recognized and a separate policy statement was
announced with regard to development of textile sector. In the year
2000, National Textile Policy was announced. Its main objective was: to
provide cloth of acceptable quality at reasonable prices for the vast
majority of the population of the country, to increasingly contribute to
the provision of sustainable employment and the economic growth of the
nation; and to compete with confidence for an increasing share of the
global market. The policy also aimed at achieving the target of textile
and apparel exports of US $ 50 billion by 2010 of which the share of
garments will be US $ 25 billion.
Strengths of Indian textile Industry
- India has rich resources of raw materials of textile industry. It
is one of the largest producers of cotton in the world and is also
rich in resources of fibres like polyester, silk, viscose etc.
- India is rich in highly trained manpower. The country has a huge
advantage due to lower wage rates. Because of low labor rates the
manufacturing cost in textile automatically comes down to very
- India is highly competitive in spinning sector and has presence
in almost all processes of the value chain.
- Indian garment industry is very diverse in size, manufacturing
facility, type of apparel produced, quantity and quality of output,
cost, requirement for fabric etc. It comprises suppliers of
ready-made garments for both, domestic or export markets.
Weaknesses of Indian textile Industry
- Indian textile industry is highly fragmented in industry
structure, and is led by small scale companies. The reservation of
production for very small companies that was imposed with the
intention to help out small scale companies across the country, led
substantial fragmentation that distorted the competitiveness of
industry. Smaller companies do not have the fiscal resources to
enhance technology or invest in the high-end engineering of
processes. Hence they lose in productivity.
- Indian labour laws are relatively unfavorable to the trades and
there is an urgent need for labour reforms in India.
- India seriously lacks in trade pact memberships, which leads to
restricted access to the other major markets.
Outlook for Indian textile Industry
The outlook for textile industry in India is very optimistic. It is
expected that Indian textile industry would continue to grow at an
impressive rate. Textile industry is being modernized by an exclusive
scheme, which has set aside $5bn for investment in improvisation of
machinery. India can also grab opportunities in the export market. The
textile industry is anticipated to generate 12mn new jobs in various
Note: The above information was last updated on 21-07-2007