5 Key Factors Fuelling the Growth of the Textile Industry in India

May 23, 2024
Updated on

The Indian Textile Industry has been a key contributor to the country’s economy in the last three years, with 7% of the manufacturing production and 2.3% of the GDP attributed to the sector. According to the Indian Brand Equity Foundation (IBEF), the Textile and Apparel Industry accounts for 13% of the country’s industrial production. It is the second-largest source of employment after agriculture, providing jobs to approximately 45 million people. It is the only industry that has generated huge employment for both skilled and unskilled labour. 

The Indian textile industry is one of the largest in the world, with a massive raw material and textile manufacturing base. The industry is divided into two major categories, the organised sector and the unorganised sector. The organised sector includes large-scale textile mills and garment manufacturers, while the unorganised sector includes small-scale cottage industries, khadi and village industries, power looms, handlooms, and hand-knitting. The sector manufactures a wide range of products, including cotton, polyester, and synthetic fabrics, yarns, threads, and garments. 

India is a global powerhouse in the textile industry, being the world’s largest cotton and jute producer. Cotton is the main raw material used in the production of textiles. Nearly 70% of global jute production originates from India. The sector is also the second-largest production base of silk and fibre. Other fibres produced in India include wool and man-made fibres. Cotton cultivation in India is mostly carried out in the states of Gujarat, Maharashtra, Punjab, Uttar Pradesh, and Madhya Pradesh. 

India is well-positioned to maintain its leadership in the textile industry with a robust industrial base that consists of a resilient supply chain extending from weaving to garment and processing and a wealth of raw materials. To realise the true potential of the industry and create more employment opportunities for the Indian workforce, it is essential to tap into the elements and forces that have been fuelling its tremendous expansion. Some of those key factors are:

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5 Key Factors Fuelling the Growth of the Textile Industry in India

Promotional Schemes and Support from the Government

The Union Budget announced by the Textile Ministry and Finance Minister has provided a major boost to the industry. The Government’s plans to set up seven mega textile parks across India is a move that will not only create more employment opportunities but also strengthen the MSME sector. These parks are equipped with advanced infrastructure and provide tax and other benefits to textile companies. An even bigger proposal that was announced is the Production-Linked Incentives (PLI) worth $1.4bn, which will help the textile and apparel manufacturing units realise their capacity potential. These initiatives by the Government are positive steps in facilitating the growth of the industry.

Anticipating the crucial role of the industry in creating employment opportunities, the government has taken several steps to introduce labour-friendly policies. For example, the EPF scheme, introduced by the Govt. of India, will bear 12% of the garment industry employers’ contribution to the EPF for new employees earning less than INR 15,000/month for the first three years.

This reform not only provides workers with greater in-hand wages but also encourages them to join the formal sector, thus helping to create more job opportunities. Other policies and initiatives to promote the industry include Duty Drawback Scheme, Technology Upgradation Fund Scheme, Export Promotion Capital Goods Scheme, and Invest India Scheme. These initiatives have helped the industry to increase its exports and become more competitive. The Indian textile industry is highly export-oriented and exports a large variety of products to many countries in the world. 

Textile Exports: A Booster

The textile and apparel industry in India is spread across the length and breadth of the country. India is the second largest textile and clothing exporter in the world, as stated by the Minister of State for Textiles, Darshana V Jardosh, while inaugurating the 68th India International Garment Fair (IIGF). Over the years, apparel has contributed to the majority of exports, followed by home textiles and fabric.

The country recorded its high-ever textiles and apparel exports (including handicrafts) in the financial year 2021-2022 at USD 44.4 billion, with an increase of 41% YoY. Exports of readymade garments, including cotton accessories, stood at US$ 6.19 billion in FY22. India’s top textile export destinations are the USA, accounting for 27% share, followed by the EU (18%), Bangladesh (12%) and UAE (6%).

According to another report from IBEF, the Indian textile industry plays a crucial role in the country’s economy, contributing approximately 15% to its export earnings. In FY22, textiles, handicrafts and apparel accounted for 10.6% of India’s total exports, making it one of the most important contributors to the country’s export revenue. Increasing exports not only creates foreign reserves but also opens doors for better employment opportunities in the country. Developing MSMEs in the sector to boost exports can create an additional 75 lakh to 1 crore jobs which is quite a number taking into consideration that the unemployment rate in India stands at 7%.

Advancements in Digital Textile Technologies

Digital textile technologies have advanced rapidly in recent years. Advances in digital printing, fabric weaving, and other processes have allowed for the production of a wide range of fabrics with greater accuracy, consistency, and cost efficiency than ever before. Digital printing has allowed for more vibrant and accurate colours to be printed onto fabrics, and inkjet printing has allowed for faster production of printed fabrics.

Digital weaving has enabled the creation of intricate patterns and styles while providing greater durability and strength. Digital textile technologies have also made it easier to source and produce fabrics with a variety of properties, such as water-repellent, fire-resistant, and antimicrobial. These advancements have revolutionised the textile industry, allowing for the production of fabrics that are both aesthetically pleasing and highly functional.

Piyush Goyal, Union Minister for Textiles, recently announced that India is currently the 5th largest producer of technical textiles in the world. Looking to the future, he is optimistic that India will be able to reach a technical textiles market size of $40 billion in the next 4-5 years. Furthermore, Goyal has expressed his ambition to increase the entire domestic textiles market to $300 billion by 2047, up from its current size of nearly $22 billion.

This is an ambitious goal that could greatly benefit the Indian economy and create a wide range of new jobs and opportunities. Investments in textile technologies have been increasing year on year and with the Government’s liberal assistance under programmes such as Technology Upgradation Fund Scheme (TUFS) providing investments as well as subsidies, the textile industry is poised for illustrious growth in the coming years.

Scope of Self-employment Opportunities

Self-employment opportunities in the textile industry are vast and varied. From designing and producing unique clothing to creating custom blankets and upholstery, there is something for everyone. The Indian textile industry is poised for significant growth in the next few years, according to a recent report by the Confederation of Indian Textile Industry (CITI). Demand for textiles in India is expected to increase at a compound annual growth rate (CAGR) of 14.8% from 2021 to 2025. The report further states that the industry will reach a size of $350 billion by 2025, making it one of the largest segments in the country. 

With the advancement in technology, the industry is well-positioned to tap into new and unexplored markets, which will further increase its potential for growth. Therefore, those with a creative eye and an entrepreneurial spirit can find success in this industry. With the rise of the internet, there are a number of outlets that individuals can use to showcase their work and get it out to potential customers. Additionally, those interested in creating their own products can find a range of tools and resources to help them get started. 

There are also a number of trade shows and other events that allow individuals to network and find potential buyers and partners. With the right amount of effort and dedication, self-employment in the textile industry can be a great way to achieve financial freedom and follow one’s passion. Khadi and Village Industries Commission under the Ministry of MSME is also taking active measures to boost the growth of micro and small-scale textile industries in rural areas. As per the scheme, over 10,000 people were trained in 2020-2021 through various training centres of KVIC (departmental as well as non-departmental). This will create self-employment and entrepreneurial opportunities and rural development.

More Jobs for Women

Women have been making great strides in the textile industry in recent decades. This is a positive development, as it enables women to gain access to a sector that was previously dominated by men. Women are now able to pursue careers in areas such as fabric manufacturing, design, production, marketing, and retail. This is excellent news for women looking to break into the textile industry, as it gives them a wider range of options to pursue.

Additionally, women’s involvement in the textile industry can help to drive innovation, as well as create more diverse perspectives and ideas. Furthermore, women are increasingly taking on leadership roles and playing an important role in driving economic growth as they are often more open to new ideas and approaches. Ultimately, it is important to ensure that more jobs for women in the textile industry become available, as this will help create a more equitable and prosperous industry.

According to a report from the Times of India, the textile and Apparel sector is an industry where women account for approximately 60-70% of the total workforce. More than 27 million women in India are employed in the textile and apparel sector. The growing employment opportunities would mean more jobs for women, thus increasing the participation and contribution of the women’s workforce in the Indian economy.


The textile industry in India is one of the oldest and most important industries in the country. It is an important source of employment and income for millions of people. India has a long history of producing high-quality textiles, and the industry has a significant role in the country’s economy. The industry is the second largest employer in India, after agriculture and employs over 45 million people. India is one of the world’s largest producers and exporters of textiles and clothing. 

Micro, Small and Medium Enterprises (MSMEs) are making an invaluable contribution to the growth of the textile industry, bringing with them the capacity to respond to changing market trends, produce innovative products and introduce new technologies. These small businesses are also providing employment opportunities to millions of people and helping to stimulate the local economy. The increased demand for clothing and apparel has resulted in a surge of growth in the textile industry, opening up opportunities for aspiring MSME entrepreneurs to follow their dreams and start their own businesses. 

However, many small businesses lack the sufficient capital needed to keep up with this demand, such as for working capital or stocking up materials for products. Therefore, to keep up with this demand, many textile businesses are availing Business Loans from Non-Banking Financial Companies (NBFCs) like Kinara Capital to expand their operations. These loans are often used for capital investments such as buying new machinery, hiring additional workers, and upgrading production facilities. With such loans, textile businesses can stay ahead of the competition, increase efficiency, and reduce costs. Businesses can also use these loans to purchase raw materials, upgrade technology, and increase their marketing efforts to reach out to more customers. 

Kinara Capital provides unsecured Business Loans to MSME entrepreneurs without submitting any property collateral. Kinara offers different types of Business Loans, including Asset Purchase Loans, Working Capital Loans and HerVikas Program, a Business Loan specially designed for MSME Women entrepreneurs. This scheme offers MSME women entrepreneurs a 1% discount on the loan interest rate without submitting any additional documents. Their goal is to support and motivate business owners who require funding to kick-start their projects. 

MSME entrepreneurs can evaluate their eligibility for a Business Loan in just 1-minute by starting the digital-first application process on the website of Kinara Capital or by downloading myKinara App. If you qualify for a myKinara Business Loans, the loan amount will be disbursed digitally to your bank account within 24-hours. Kinara Capital also provides multilingual doorstep customer services to MSMEs interested in learning more and needing assistance to apply. Also, we have a dedicated customer support team available between Monday – Friday (9.30 AM – 6.00 PM) at our toll free number 1800-103-2683 for any questions or assistance. This ensures that entrepreneurs can get the help they need throughout the loan process.


What is the textile industry?

The textile industry is a broad category of businesses that manufacture and distribute textiles, including fibres, yarns, fabrics and apparel.

What is the difference between apparel and textiles?

Apparel is clothing, footwear and accessories made from textiles. Textiles are fabrics, yarns and fibres used to produce these items.

What is the difference between yarn and fabric?

Yarn is a continuous strand of fibre that is used to create fabrics. Fabric is a woven or knitted material made from yarns.

What are the different types of textile manufacturing processes?

The most common processes include weaving, knitting, felting and dyeing. Weaving involves interlacing two sets of yarns together to form a fabric. Knitting involves looping yarns together in a pattern to create a fabric. Felting involves pressing fibres together to form a fabric. Dyeing involves adding colour to a fabric.

What is the role of technology in the textile industry?

Technology plays a major role in the textile industry. It is used to automate processes, improve quality and reduce costs.

What are the major end uses for textiles?

The major end uses for textiles include apparel, home textiles, industrial textiles and technical textiles.

What are the benefits of the textile industry?

The textile industry provides numerous benefits, including job creation, economic growth, and the development of innovative products. Additionally, the industry plays an important role in providing a sustainable source of materials for clothing, footwear, and other products. 

What is the future of the textile industry?

The future of the textile industry is expected to be driven by innovation, with advances in technology and materials leading to more efficient and sustainable production processes. Additionally, the industry is expected to focus more on ethical production, using materials that are sourced responsibly and manufactured in an environmentally friendly manner. 

What are the challenges facing the textile industry?

The textile industry faces a number of challenges, including the rising cost of raw materials, competition from low-cost countries, and environmental concerns. Additionally, the industry has been affected by changing consumer tastes and preferences, which has led to a need for more innovative and sustainable products.

How has the textile industry changed over time?

The textile industry has changed significantly over time due to the introduction of new technology and the development of new fabrics. This has allowed for faster production times, a greater variety of fabrics, and more efficient processes.

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