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. For the near term (2012), the sector is valued at US$ 110 billion by the Confederation of Indian Textile Industry (CITI).
The size of the Indian textile market in 2011 was US$ 99.7 billion; the market had recorded a compound annual growth rate (CAGR) of 19.3 per cent over 2009-11. Apparel, the largest contributor to textile market share, accounted for 62 per cent of the total market share in 2009 while textile contributed 38 per cent to the total share.
The Government of India allows 100 per cent foreign direct investment (FDI) through the automatic route is allowed in the Indian textile sector. FDI in the textile industry was US$ 1115.6 million April 2000 to February 2012.
National Textile Policy-2000 was introduced for the overall development of textile industry. Scheme for Integrated Textile Park (SITP) was approved in July 2005 to facilitate setting up of textiles parks with world class infrastructure facilities. Technology Upgradation Fund Scheme (TUFS) infused an investment of more than US$ 43 billion until June 2010. Investment was made to promote modernisation and upgradation of the textile industry by providing credit at reduced rates.
Over US$ 35 billion of investments have been made in the textile & clothing sector during the last four years, with the cotton textile segment accounting for around 75 per cent. India's textile trade is dominated by exports. Exports grew to US$ 27 billion in FY11 from US$ 17.6 billion in FY06, a CAGR of 8.8 per cent.