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Textile Industry in India

February, 2013


The Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textiles industry also plays a vital role through its contribution to industrial output, employment generation, and the export earnings of the country.

The sector contributes about 14 per cent to industrial production, 4 per cent to the gross domestic product (GDP), and 17 per cent to the country's export earnings. It provides direct employment to over 35 million people. 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 economy of the nation.

Market Size

The Indian textile industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand. Abundant availability of raw materials such as cotton, wool, silk and jute and skilled workforce has made India a sourcing hub.

The most significant change in the Indian textile 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. MMF production recorded an increase of 3 per cent during April-December 2012.

Cotton yarn production increased by about 13 per cent during December 2012 and by about 14 per cent during April-December 2012. Blended and 100 per cent non-cotton yarn production increased by 6 per cent during December 2012 and production increased by 1 per cent during the year April-December 2012.

Cloth production by mill sector increased by 18 per cent during December 2012 and increased by 19 per cent during April-December 2012.

Cloth production powerloom has increased by 1 per cent during December 2012. During April-December 2012, powerloom and hosiery production increased by 1 per cent and 10 per cent respectively and handloom production remained at the same level during the same period. The total cloth production increased by about 1 per cent during December 2012 and increased by 4 per cent during April-December 2012.

The potential size of the Indian textile and apparel industry is expected to reach US$ 221 billion by 2021, according to Technopak's Textile and Apparel Compendium 2012.


The textiles sector has witnessed a spurt in investment during the last five years. The industry (including dyed and printed) attracted foreign direct investments (FDI) worth Rs 5656.42 crore (US$ 1.04 billion) during April 2000 to November 2012.

Some of the major investments in Indian Textile Industry are:

  • British clothing brand Superdry plans to open 20 stores in India over the next five years, as per Mr James Holder, Founder, Superdry
  • The Export Promotion Council for Handicrafts (EPCH) is setting up an international lace trade centre at Narsapuram in Andhra Pradesh (AP) with an outlay of Rs 15.33 crore (US$ 2.82 million)
  • The Aditya Birla Group has signed an in-principle agreement to buy the assets of Ontario-based Terrace Bay Pulp Mill for Rs 605 crore (US$ 111.62 million). The acquisition would be carried out through AV Terrace Bay (Canada), a special purpose vehicle (SPV) in which two group companies, Grasim Industries and Thailand-based Thai Rayon Public, would hold stake
  • American apparel-maker, Tommy Hilfiger plans to add 500 stores in India over the next five years as part of their expansion spree. Currently, Tommy Hilfiger operates 58 franchisee outlets and over 60 shop-in-shops in other department stores
  • Italian luxury apparel maker, Canclini Tessile is tying up with Tirupur-based Emperor Textiles to stitch its shirts in India. The equal joint venture (JV) with Emperor Textiles will set up a separate manufacturing unit in Tirupur to manufacture Italian fabric for domestic consumption