1.

Textile Industry in India

Textile Industry is one of the earliest industries to have developed in India. It is biggest employer
after agriculture and provides direct employment to 4.5 crore people and another 6 crores in allied
sectors

 India is the second-largest manufacturer of textiles and clothing in the world.

 India is also the second-largest exporter of textiles and apparel with a share of 5% of global
trade.
 India has emerged as the largest producer of cotton in the world with a production of 370
lakh bales in 2017–18 and the second-largest exporter of cotton.

1.1 Structure of India’s Textile Industry

India’s textile industry is comprised mostly of small-scale, non-integrated spinning, weaving,

finishing, and apparel-making enterprises.

• Composite Mills. Relatively large-scale mills that integrate spinning, weaving and, sometimes,
fabric finishing. Account for about only 3 percent of output in the textile sector. About 276
composite mills are now operating in India, most owned by the public sector and many deemed
financially “sick.”

• Spinning. Spinning is the process of converting cotton or manmade fiber into yarn to be used for
weaving and knitting. Largely due to deregulation beginning in the mid-1980s, spinning is the most
consolidated and technically efficient sector in India’s textile industry. Average plant size remains
small, however, and technology outdated, relative to other major producers. In 2002/03, India’s
spinning sector consisted of about 1,146 small-scale independent firms and 1,599 larger scale
independent units.

• Weaving and Knitting. Weaving and knitting converts cotton, manmade, or blended yarns into
woven or knitted fabrics. India’s weaving and knitting sector remains highly fragmented, small-scale,
and labour-intensive. This sector consists of about 3.9 million handlooms, 380,000 “power loom”
enterprises that operate about 1.7 million looms, and just 137,000 looms in the various composite
mills. “Power looms” are small firms, with an average loom capacity of four to five owned by
independent entrepreneurs or weavers. Modern shuttle less looms account for less than 1 percent
of loom capacity.

• Fabric Finishing. Fabric finishing (also referred to as processing), which includes dyeing, printing,
and other cloth preparation prior to the manufacture of clothing, is also dominated by a large
number of independent, small scale enterprises. Overall, about 2,300 processors are operating in
India, including about 2,100 independent units and 200 units that are integrated with spinning,
weaving, or knitting units.

• Clothing. Apparel is produced by about 77,000 small-scale units classified as domestic

manufacturers, manufacturer exporters, and fabricators (subcontractors).
1.2 Overview of Textile Value Chain

1.3 Market Size

 India’s textiles industry contributed 7% of the industry output (in value terms) in FY19.
 It contributed 2% to the GDP of India and employed more than 45 million people in FY19.
 The sector contributed 15% to India’s export earnings in FY19.
 Textiles industry has around 4.5 crore employed workers including 35.22 lakh handloom
workers across the country.
 The domestic textiles and apparel market stood at an estimated US$ 100 billion in FY19.
 The production of raw cotton in India is estimated to have reached 36.04 million bales in
FY20^.
 During FY19, production of fibre in India stood at 1.44 million tonnes (MT) and reached 1.60
MT in FY20 (till January 2020), while that for yarn, the production stood at 4,762 million kgs
during same period.

1.4 Major Concerns

 High contamination level and poor quality of fibre, both in fineness and length.
 While India leads in cotton yarn exports, it has been a very marginal player when it comes to
cotton fabric in world exports. China has a substantial share of 51% in cotton fabrics when
compared to India’s 5%–6%; the situation is almost the same in case of MMF fabrics. This
comparison suggests that India is not able to scale up the value chain significantly enough to
meet the global demand despite being the largest producer and exporter of cotton yarn.
 Approximately 95% of the weaving sector in India is unorganized in nature. 
 The decentralized power loom and hosiery sector contributes 85% of total fabric production.
  The processing segment is also dominated by a large number of independent, small-scale
enterprises. It has challenges such as :
 inadequate know-how,
 low focus on research,
 innovation in new product development and
 low technology upgradation

 The weaving sector remains one of the weakest links of the Indian textile and apparel
industry.

1.5 Industry trends