What is the Indian textile industry: Meaning, importance, types, benefits, processes

Learn about the meaning, structure, growth, impact and economy overview of textile industry in India.
Business Loan
3 min
18-May-2024

The textile industry is a key sector that blends heritage, innovation, and economic progress. This guide provides a complete overview of the Indian textile industry, explaining its definition, main processes, types, organisational structure, and historical evolution. It emphasises the industry’s economic, social, and cultural significance, India’s role in the global market, and emerging trends like sustainability and digitalisation. Readers will gain a clear understanding of how the textile sector fuels employment, drives innovation, and supports international trade.

What is the textile industry?

The textile industry in India is a comprehensive sector involving research, design, development, manufacturing, and distribution of textiles and clothing. It covers the entire production process, from fibre cultivation to the creation of finished products. This includes natural fibres like cotton and silk, as well as synthetic ones like polyester and nylon. The industry spans spinning, weaving, dyeing, and finishing, contributing to diverse applications such as clothing, home furnishings, and industrial materials. It plays a crucial role in global trade, economic growth, and cultural expression, influencing fashion and design trends worldwide.

What are the 4 main processes of the textile industry?

The textile industry involves a series of complex processes, each essential for transforming raw materials into finished products. Here are the four main processes:

1. Spinning

In spinning, fibres are converted into yarns through various methods such as ring spinning, open-end spinning, or air-jet spinning. This process involves twisting the fibres together to form continuous strands suitable for weaving or knitting.

2. Weaving

Weaving is the process of interlacing yarns perpendicular to each other to create fabric. This is typically done on a loom, where the warp (longitudinal) and weft (transverse) yarns are woven together to form the desired textile structure.

3. Knitting

Knitting involves the interlocking of loops of yarn to create fabric. Knitted fabrics can be produced using hand-operated or automated knitting machines, offering versatility in texture, stretch, and design.

4. Finishing

Finishing encompasses a range of treatments applied to fabrics to enhance their properties or appearance. This may include processes such as dyeing, printing, bleaching, sizing, or coating to achieve desired colours, patterns, textures, or performance characteristics.

These four processes are fundamental to the textile industry, enabling the production of a wide range of textiles used in clothing, home furnishings, technical applications, and more.

Types of the textile industry

The textile industry encompasses various sectors that produce different types of textile products to meet diverse consumer needs and industrial requirements. Here are some key types of the textile industry:

1. Apparel textiles

This sector focuses on the production of clothing and accessories, including garments made from woven or knitted fabrics. Apparel textiles range from everyday wear like shirts, pants, and dresses to specialised items such as sportswear, formal attire, and outerwear.

2. Home textiles

Home textiles comprise a wide range of products used in household furnishing, decoration, and utility. This category includes items such as bedding (sheets, pillowcases, duvet covers), curtains, upholstery fabrics, towels, rugs, and table linens.

3. Technical textiles

Technical textiles are designed for specialised applications beyond apparel and home furnishings. These textiles serve industrial, medical, automotive, aerospace, geotextile, and protective clothing sectors. Examples include filtration fabrics, medical textiles, automotive airbags, and composite reinforcements.

4. Nonwoven textiles

Nonwoven textiles are produced without the traditional weaving or knitting processes. Instead, fibres are bonded together mechanically, chemically, or thermally to form fabrics. Nonwovens find applications in hygiene products (diapers, wipes), medical supplies, filtration media, geotextiles, and industrial wipes, among others.

These diverse sectors of the textile industry cater to a wide range of markets and applications, contributing to global manufacturing and trade.

Importance of the textile industry

1. Economic Significance
The textile industry plays a major role in driving economic growth:

  • Employment Generation: One of the world’s largest employers; in India, second only to agriculture, providing direct employment to over 45 million people and indirectly supporting around 100 million.
  • Contribution to GDP: Accounts for roughly 2.3% of India’s GDP and 8.5% of Pakistan’s.
  • Foreign Exchange Earnings: India earned US$34.4 billion from textile exports in 2023–24.
  • Industrial Output: Represents nearly 13% of India’s total industrial production.

2. Functional Importance
Textiles extend beyond clothing to serve critical functions:

  • Technical Textiles: Applied in healthcare, transport, agriculture, and defence.
  • Everyday Essentials: Provide protection, warmth, and shelter.

3. Social and Cultural Value

  • Cultural Heritage: Handloom and Khadi symbolize tradition and self-reliance.
  • Women’s Empowerment: A major source of employment for women in developing regions.
  • Social Expression: Clothing reflects identity, status, and personal style.

4. Innovation and Sustainability

  • Technological Advancement: Leading the way in Industry 4.0 with AI, IoT, and advanced manufacturing techniques.
  • Environmental Responsibility: Emphasis on biodegradable fibres, recycling, and reducing industrial pollution.

Structure of India’s textile industry

India's textile industry is structured into two main sectors: the organised sector, which includes large mills and the unorganised sector, which consists of small-scale, informal mills. The industry is segmented into various phases such as spinning, weaving, finishing, and apparel manufacturing, each playing a critical role in the overall process. The organised sector typically uses modern machinery and adheres to labour laws, providing higher wages and stable employment to its workers. On the other hand, the unorganised sector often operates with older equipment and less formal working conditions, contributing significantly to employment but often under less regulated environments.

Composite mills

Composite mills are integrated facilities in India that carry out spinning, weaving, and processing all under one roof. These mills are highly efficient, producing a wide range of fabrics and garments, and contribute substantially to the industry's output due to their capability to control quality and minimise production costs. Their integrated nature allows for swift adaptability to market changes and trends, enhancing their competitive edge in both domestic and international markets.

Spinning

The spinning segment of the textile industry, particularly in the cotton textile industry, involves converting cotton or other fibres into yarns which are then used to create fabrics. India’s spinning mills are renowned globally for their quality and scale, making India the world's second-largest producer of textile yarns and fabrics. These mills are equipped with state-of-the-art technology that significantly boosts productivity and efficiency, ensuring they meet global standards.

Weaving and knitting

Weaving involves interlacing yarns to make fabrics, while knitting uses yarn to make cloth by creating consecutive rows of loops. Both processes are crucial for fabric production in India and are performed at various scales across the country, from artisanal handlooms to large automated mills. This diversity in production techniques helps cater to a wide range of market demands, from traditional textiles to modern fashion trends.

Fabric finishing

Fabric finishing is a critical phase where textiles are treated with chemicals and heat to prepare them for the market. This process includes bleaching, dyeing, printing, and setting textiles to improve appearance, performance, and feel. Finishing techniques are continually evolving, with innovations aimed at making the processes more environmentally friendly and sustainable.

Clothing

  • Manufacturing: India’s clothing production includes high-end fashion, everyday wear, and mass-produced garments. The industry also supports numerous ancillary industries like embroidery and embellishment, which add significant value to the finished products.
  • Export: A significant portion of produced garments are exported, making it a vital sector for India's foreign earnings. These exports help to brand Indian textile craftsmanship on the global stage, enhancing its reputation as a quality manufacturing hub.
  • Domestic market: The domestic clothing market in India is vast, catering to a diverse consumer base. It is characterised by a robust demand for both traditional attire and contemporary fashion, reflecting the country's rich cultural heritage and modern aspirations.

Growth of textile industry in India

The growth of the textile industry in India has been propelled by favourable government policies, increasing export demand, and advancements in technology. This sector has witnessed significant modernisation, which has improved its competitiveness globally and increased its contribution to the Indian economy.

Size of textile industry in India

  • Volume: India accounts for approximately one-fourth of the global trade in cotton yarn.
  • Employment: The industry employs over 45 million people directly.
  • Output: It contributes about 2% to the GDP of India.

Key advantages of the Indian textiles industry

  • Cost-effectiveness: Competitive labour costs and abundant raw material supply.
  • Diversity: Wide range of fibres used, from natural to synthetic.
  • Flexibility: High adaptability to global trends and demands.

Government initiatives

  • Make in India: Promotes textile manufacturing in India.
  • Skill India: Offers training for textile workers.
  • Export Incentives: Various subsidies and tax rebates to boost exports.

History of textile industry in India

Ancient Era (Before 15th Century)

  • Indus Valley Civilisation (c. 2500 BCE): Evidence of cotton spinning, weaving, and indigo dyeing.
  • Vedic and Classical Periods: Advanced weaving techniques; silks, wools, and fine muslin were exported to Roman and Egyptian markets.

Medieval and Mughal Era (1526–1857)

  • Global Recognition: Famous for muslins from Dacca and silks from Kashmir and Bengal.
  • Artisan Craftsmanship: Distinct regional styles thrived under Mughal patronage.

Colonial Period (1757–1947

  • Decline of Handlooms: Traditional weavers were adversely affected by British policies and imported textiles.
  • Mechanisation: Cotton mills were established (1854 in Bombay), with Ahmedabad becoming a major centre.
  • Swadeshi Movement: Textiles became a symbol of self-reliance and independence.

Post-Independence (1947 onwards)

  • Revival: Modernisation and development initiatives strengthened the sector.
  • Global Presence: India emerged as a leading textile producer, blending traditional craft with modern industry.

Geographical factors affecting textile industry

Geographical factors significantly influence the textile industry. Climate plays a crucial role, as cotton, a primary raw material, thrives in warm, dry regions like Gujarat and Maharashtra in India. Proximity to water bodies is essential for dyeing and processing textiles, making coastal areas favorable. Additionally, access to raw materials such as cotton, wool, and silk affects regional textile production. Availability of labor, influenced by population density, supports large-scale manufacturing in urban areas. Transportation infrastructure facilitates the movement of raw materials and finished products. These geographical factors collectively determine the location, efficiency, and growth of the textile industry.

Indian textile industry in the global scenario

The Indian textile industry is an influential player in the global market, known for its vast array of fabrics and heritage-rich crafts like handlooms and handicrafts. It ranks as the second-largest textile exporter after China, playing a crucial role in the international textile and apparel market.

Indian textile industry – SWOT analysis

SWOT analysis is crucial for the Indian textile industry as it provides a clear framework for evaluating the competitive position and future directions of the industry. By analysing strengths, weaknesses, opportunities, and threats, it helps industry leaders and businesses to identify internal capabilities and external possibilities for growth. Moreover, it aids in strategic planning by allowing companies to prioritise areas for improvement, optimise resources, and better prepare for industry challenges such as technological advancements and global competition.

Strength

  • Vast raw material base: This ensures a reliable supply for continuous production and less dependency on imports.
  • Low-cost labour force: This advantage makes India competitively priced in the global textile market.
  • Strong production capacity: The country's extensive manufacturing capabilities enable it to meet both domestic and international demand efficiently.

Weakness

  • Infrastructure bottlenecks: These often result in delays and increased costs, impacting overall productivity.
  • Technological gaps compared to leading textile nations: This can limit the quality and types of textiles India can produce competitively.
  • Fragmented industry structure: This often leads to inefficiencies and difficulties in implementing industry-wide technological and environmental standards.

Opportunity

  • Expanding domestic and international markets: This presents a chance for significant growth and scaling of operations within the industry.
  • Increasing demand for sustainable and organic textiles: This opens avenues for India to innovate and capture new market segments focused on eco-friendly products.
  • Potential for higher value-added textiles: There is an opportunity to move up the value chain by producing more sophisticated and technologically advanced textiles.

Threats

  • Competition from countries like Bangladesh and Vietnam: These nations offer similar advantages and are aggressive in capturing market share.
  • Fluctuating raw material prices: This unpredictability can affect cost control and pricing strategies, impacting profitability.
  • Regulatory challenges: Compliance with both domestic and international regulatory standards can be complex and costly.

Indian textile industry trends in India

  • Sustainable and Eco-Friendly Production: Increasing use of natural fibres, plant-based dyes, and circular recycling systems to reduce environmental impact.
  • Digitalisation and Smart Manufacturing: Implementation of Industry 4.0 technologies such as AI, IoT, automation, smart factories, and low-impact finishing methods.
  • Growth of Technical Textiles: Rising demand for industrial, medical, and automotive textiles, supported by government initiatives.
  • Digital Textile Printing: Allows flexible designs, quicker turnaround, small-batch production, and less waste.
  • Customisation and Small-Batch Fashion: Made-to-order and personalised products, enabled by D2C digital platforms.
  • Nearshoring and Localised Supply Chains: Shorter, resilient supply chains increasing the appeal of “Made in India” products.
  • E-commerce Expansion: Online marketplaces and data-driven strategies broadening domestic and international market reach.

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Conclusion

The Indian textile industry remains a cornerstone of the national economy, embodying a perfect blend of tradition and modernity. With strategic support through business loans and government initiatives, this sector is poised for robust growth, aiming to further penetrate global markets and enhance its economic contribution. A business loan can be a reliable way to acquire the business finance you need to grow your business as per your plan. You can also explore the option for a secured business loan to meet your needs.

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Frequently asked questions

What are the three types of textile industry?

The textile industry is organised into three main sectors based on the production process. The Primary Textile Industry involves the initial processing of raw materials like spinning fibres into yarns. The Secondary Textile Industry is focused on transforming these yarns into fabrics, primarily through weaving or knitting, while the Tertiary Textile Industry deals with the finishing of these fabrics and the manufacturing of final textile products such as clothing.

Does India have a textile industry?

India hosts a major segment of the global textile industry, which includes manufacturing of everything from raw materials to finished garments. It is one of the world's leading textile producers.

What is the capital of textile?

While the title "Capital of Textile" can vary depending on context, Manchester in the UK was historically known as the Textile Capital of the World due to its significant role during the Industrial Revolution. In India, cities like Mumbai, Surat, and Ahmedabad are often considered textile hubs.

What is the full meaning of textile?

The term "textile" comes from the Latin word 'texere' which means "to weave". It refers broadly to any material made of interlacing fibres, including fabric produced by weaving, knitting, or felting.

What is an example of textile?

An example of a textile is cotton fabric, which is made from the cotton plant's natural fibres and used in a wide variety of products, from clothing to home furnishings.

What is the cloth industry?

The cloth industry refers to the sector of the textile industry that specifically deals with the production of fabrics from various fibres. It includes several processes such as spinning, weaving, dyeing, and finishing of fabrics.

How big is the cloth industry in India?

The Indian textile industry is one of the largest in the world, with a vast infrastructure supporting millions of jobs across various segments from manufacturing to retail. The cloth industry in India is one of the country's key economic sectors, contributing significantly to both GDP and employment. As of FY’22, the industry size was estimated to be Rs. 10 lakh crore.

What are the risk factors of the textile industry?
What are the major pollutants of the textile industry?

The major pollutants from the textile industry are chemical dyes, wastewater containing harmful substances, air emissions from factories, and solid waste from non-biodegradable materials. These pollutants contribute to environmental degradation and health issues.

What are some promising business ideas in the textile industry?

Promising business ideas in the textile industry include sustainable fashion lines using eco-friendly materials, smart textiles with embedded technology, custom textile printing services, and direct-to-consumer online retail platforms. Additionally, niche markets like organic fabrics, activewear, and home textile innovations offer significant growth potential.

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