Cotton Textile Industry in India – UPSC

  • Cotton textiles are India’s oldest manufacturing tradition and its largest organised modern industry by older reckoning, spread today through mills, powerlooms and handlooms.
  • The modern industry is an indigenous one, because Indian capital and entrepreneurship started and developed it.
  • It is agro-based, resting on a kharif fibre crop of the black-soil and irrigated north-western tracts in India’s cropping pattern.
Map of India marking cotton, silk, wool and jute centres as listed in 2014, with wool in the north-west, jute in the Ganga plain and on the Andhra coast, and paired cotton and silk centres in the south.

The Textile Sector and Cotton’s Place

India in the World Textile Economy

  • Textile is the broad term that takes in cotton, jute, wool, silk and synthetic fibres.
  • World standing, as stated by the government in February 2026:
    • Jute: largest producer, the base of its jute textile industry.
    • Cotton: largest area under the crop and second-largest producer, with about 24% of world output.
    • Silk: second-largest producer.
    • Man-made fibres: second major global hub, and second-largest producer of polyester and viscose.
  • Trade: India is the sixth-largest exporter of textiles and apparel, with about 4% of world exports.
    • Its share of global textile and apparel trade was 3.91% in 2023-24, and textiles made up 8.21% of India’s own exports that year.
  • Foreign investment: 100% FDI is allowed through the automatic route in the textile sector.
MeasureOlder figure2025 estimate2026 estimate
Share of GDP4%2.3%about 2%
Share of industrial production12%13%
Share of manufacturing value addedabout 11%
Share of exports11%12%8.63–9%
Direct employment45 millionover 45 millionover 45 million
  • It is the second-largest employer after agriculture, and takes in many women, Scheduled Caste and Scheduled Tribe workers.
  • Size: an estimated USD 179 billion in 2026, with about 22,000 million garments made each year.
    • About 80% of capacity lies in micro, small and medium clusters.
    • Official targets for 2030 are a market of USD 350 billion and exports of USD 100 billion.
    • Older accounts rank India first in the world for loomage and ring spindles.
  • The cotton chain supports about 6 million farmers and 40–50 million people in all.
    • Crop output stood at 29.72 million bales of 170 kg in 2024-25, against mill use of about 323 lakh bales in 2023-24.
  • The sector’s self-reliance runs from raw material to finished garment, and in older figures it added only 2–3% to the import bill.

Growth of the Industry

Ancient and Medieval Monopoly

  • For some three millennia, from about 1500 BC to AD 1500, India had no rival in cotton textiles.
  • In the Middle Ages, Indian cloth was in great demand in Eastern and European markets. Each centre had its own fame:
    • Muslins of Dhaka
    • Chintzes of Masulipatnam
    • Calicos of Calicut
    • Baftas of Cambay
    • Gold-wrought cotton goods of Burhanpur, Surat and Vadodara
  • Collapse: two forces ended this lead.
    • Modern mills of the Industrial Revolution turned out cheaper and better goods in Britain.
    • British India’s discriminatory policy gave the British industry a political advantage.

Incipient Phase (Up to 1900)

YearEvent
1818First modern mill at Fort Gloster near Kolkata; it soon closed
1854Cowasji Nanabhoy Davar, a Parsi entrepreneur, founds the first successful mill at Mumbai
1860sShahpur Mill (1861) and Calico Mill (1863) at Ahmedabad
1870sReal expansion begins
1875-7647 mills, with over 60% in Mumbai alone
  • Ranchhodlal Chhotalal laid the foundation of Ahmedabad’s first textile plant in 1859, and it opened in 1861.
  • Mumbai was the focus of early growth, for these reasons:
    • Capital: Parsi merchants held large funds from the cotton and opium trade with China and from raw cotton exports during the American Civil War.
    • Technical skill came through European firms.
    • Raw material: large cotton tracts lay nearby, and their crop was already being exported through Mumbai.
    • Port: it allowed import of machinery, chemicals and long-staple cotton, and the export of cloth. The long-staple sources of Egypt, Sudan and East Africa lay within easy sailing distance.
    • Railways in and around the region.
    • Labour: cheap and unskilled, drawn from the surrounding areas.
    • Climate: humidity let thread be spun without breaking.
    • Power, market and start: cheap hydroelectricity from nearby, a market at home and abroad, washing and dyeing facilities, and the advantage of an early start.
    • Soil: the black cotton soil of its hinterland.

Primary Core (1900–1920)

  • World War I raised demand and cut supplies from other countries.
  • The Swadeshi movement and later fiscal protection added to the growth.
    • The country had 271 mills employing about 2.6 lakh people when war broke out in 1914.
  • Ahmedabad became another major centre. Others were Surat, Kalyan, Thane, Vadodara, Bharuch and Pune.
  • Why dispersal began:
    • Raw material was available elsewhere too.
    • Land costs rose in Mumbai.
    • Trade unions were emerging in Mumbai.
    • Railway lines reached into the Peninsula, especially after 1921.
  • Dispersal ran in two directions:
    • North, up to Delhi: the Malwa plateau gave cheap raw material, princely states offered free land and capital, labour was cheap, and the markets of North India lay close.
    • East: across the Telangana and Deccan lava plateau, up to Nagpur in the east and Hyderabad in the south-east.
  • Centres with a special advantage:
    • Nagpur: nearness to coal mines
    • Kanpur: excellent financial facilities
    • Kolkata: port and market

World War II and Partition

  • Wartime demand raised the count from 334 mills in 1926 to 389 in 1939 and 417 in 1945.
    • Cloth output climbed over the war from 4,012 to 4,726 million yards (1939-40 to 1945-46).
  • Partition (1947) left most mills in India but sent most of the long-staple cotton tracts to Pakistan.
    • Imports had to fill the gap at a time of scarce foreign exchange, so home output of long staple became the priority.

Post-Independence

  • Efforts on the raw material side:
    • Grow More Cotton campaign, to answer the loss of cotton land.
    • Intensive cotton-growing programmes of 1971-72, for production and productivity.
    • Central Institute for Cotton Research, set up by the Indian Council of Agricultural Research at Nagpur in April 1976.
    • Technology Mission on Cotton, covering all aspects of cultivation and use.
    • The private sector was encouraged to set up units.
  • Dispersal trends after 1947:
    • Green Revolution tract: irrigation of the old alluvium favoured cotton, and the industry grew fast in Punjab, Haryana, western Uttar Pradesh and Delhi.
      • Punjab: Jalandhar, Ludhiana, Pathankot, Amritsar
      • Haryana: Ambala, Faridabad
      • Uttar Pradesh: Agra, Saharanpur, Ghaziabad, Modinagar
      • Cotton needs soil moisture rather than surface water, so soils that hold water for long suit it. New alluvium does not.
    • Market pull: India’s tropical climate makes the whole country a market. The Hugli region of West Bengal rose as a major region on this basis.
    • Eastern and central Uttar Pradesh: Lucknow, Varanasi and others. By now the industry reached almost all States.
    • South: Coimbatore, Madurai and Tirunelveli became the major centres, in Tamil Nadu and on into Keralam (Kerala), because of:
      • Hydroelectricity, for example the Pykara project
      • Readiness of local industrialists to use favourable conditions
      • Raw cotton farming in the Madurai–Coimbatore region
      • Available markets
    • Labour cost: the industry moved from high-wage to low-wage places, such as Madurai, Ujjain, Agra, Tirunelveli and Coimbatore.

Present Status

  • Rank and weight: one of India’s largest industries by employment, production and exports.
    • Older counts gave it about 16% of industrial capital, 14% of industrial production and over 20% of industrial labour.
    • The total workforce stood well over 25 million in those counts.
  • Mills (older count): 1,719 textile mills, of which 188 were public, 147 cooperative and 1,384 private. About three-fourths were spinning mills and one-fourth composite.
    • It is no longer an off-season occupation, as it was in its cottage form. That ancient industry declined for political and economic reasons.
  • Cotton cloth is made in three sectors, and the balance has swung sharply away from the mill.
Line chart of cotton cloth output in million square metres from 1950-51 to 2011-12: the mill sector falls from 3,401 to 1,724, while the decentralised sector climbs from 814 to 28,846 and overtakes the mills by 1980-81.
Sector1950-512005-062011-122016-17 (all fabric)
Millsabout 80%3.3%5.64% (cotton cloth)3.56%
Powerlooms82.8–85% with hosieryabout 62%56.63%, plus hosiery 27.30%
Handlooms12.3–12.5%about 15%12.51%
  • Mills dominated at first and then gave way, as the decentralised sector rose from 19.31% of cotton cloth in 1950-51 to a peak of 95.41% in 2007-08.
    • Total cotton cloth grew from 4,215 to 30,570 million square metres between 1950-51 and 2011-12, and spun yarn from 533 to 3,126 million kg.
    • A decentralised unit may hold 5–10 looms or just one, so thousands of tiny sheds now outweigh the large mills.
  • Powerlooms:
    • Older counts: 5.28 lakh units with 23.33 lakh looms in March 2011, of which 1.15 lakh were shuttleless.
    • 2013 survey (cited by the ministry in December 2025): 3,85,596 units, 24,86,418 looms and 44.18 lakh workers, with 1,03,141 shuttleless looms.
      • Maharashtra leads with 9.49 lakh looms, followed by Tamil Nadu (5.63 lakh) and Gujarat (5.24 lakh).
    • Concentration: Maharashtra, Gujarat, Tamil Nadu, Uttar Pradesh, Madhya Pradesh, West Bengal and Karnataka.
    • Clusters: Bhiwandi, Erode, Salem, Madurai, Ichalkaranji, Solapur, Burhanpur, Bhilwara, Kishangarh, Ludhiana, Amritsar and Panipat.
    • Weight: over 60% of export fabric comes from powerlooms, and ready-made garments and home textiles lean on them for cloth.
      • They make almost every variety of cloth, technical textiles included.
      • Older output: 30.63 billion square metres in 2005-06, rising to 37.52 billion in 2010-11.
      • The share of cotton cloth stood at 58.4% in a 2022 ministry reply.
    • Support: 44 Powerloom Service Centres serve the clusters on technology, skills and design.
  • Handlooms:
    • Older counts: about 38 lakh handlooms employing nearly 6 million people, later 23.77 lakh looms and 43.31 lakh persons.
    • Handloom Census 2019-20: 35.22 lakh workers (26.74 lakh weavers and 8.48 lakh allied workers, with about 25.46 lakh women) on 28.20 lakh looms.
    • Spread (older): about one-third in Tamil Nadu, Andhra Pradesh, Assam and Uttar Pradesh, with the rest in Maharashtra, West Bengal, Bihar, Odisha, Rajasthan and Karnataka.
    • Strengths: unique designs, small batches and eco-friendly cloth.
    • Training: Indian Institutes of Handloom Technology at Varanasi, Salem, Guwahati, Jodhpur and Bargarh, and 25 Weavers’ Service Centres.
    • Output (older): 6,667 million square metres in 2008-09, rising to 6,936 million in 2012-13.
Map of India marking cotton, woollen and silk textile centres, with cotton in the west and the large markets, wool in the north-west, and silk in Kashmir, Karnataka and Bengal.

Location and Distribution

Factors of Location

  • Raw material:
    • Raw cotton is easily transported, and many mill towns do not grow it. Its availability still helps fix mills, alongside other advantages.
    • Older estimates put 80–90% of the industry in step with the cotton tracts of the drier western Peninsula and the Great Plains.
    • Ahmedabad, Coimbatore, Solapur, Nagpur and Indore lie in areas of large-scale cultivation. Mumbai has this advantage to a lesser degree, through the cotton lands of Maharashtra and Gujarat.
    • Cotton is a pure raw material. It loses little weight in manufacture, and sizing materials make up for even that.
  • Market:
    • It ranks close behind raw material among the factors of location.
    • Since raw cotton and cloth cost about the same to carry, the industry tends to seek good transport towards the market. This makes it primarily market-oriented.
    • The country lies in the tropics and sub-tropics, so cotton is worn all year in the Peninsula and most of the year on the Great Plains.
    • Large centres also stand in States with little or no cotton, such as West Bengal, Bihar, Uttar Pradesh, Keralam and Odisha.
  • Labour:
    • Cotton weaving was a traditional cottage craft of the cotton tracts, so cheap skilled labour was at hand there.
  • Other factors:
    • Cheap and efficient transport, abundant power, fresh water and, above all, enterprise.
    • Geographical inertia and the government’s policy of decentralisation.
  • Mills are localised even within a State, in particular districts, almost to the exclusion of others.

Distribution

  • It is among the most widely distributed industries, with mills in over 80 towns and cities in older counts.
  • Maharashtra and Gujarat together make a major share of India’s cloth.
  • State ranks below come from older tables. Output has since shifted towards powerloom clusters.
Map of India marking 112 cotton textile centres, thickest in Gujarat, Maharashtra and Tamil Nadu and spread across the Great Plains and the port cities.

Maharashtra

  • Leading producer of yarn and cloth in the older tables, and third by number of mills.
    • About 39% of mill cloth, 10.79% of yarn, about three lakh workers and 122 mills, of which 63 stood in Mumbai.
  • Mumbai is the Cottonopolis of India.
  • Other centres: Solapur, Nagpur, Pune, Jalgaon, Kolhapur, Satara, Wardha, Aurangabad, Amravati, Akola, Sangli, Chalisgaon, Miraj and Nanded.
  • The decline of Mumbai’s mills turned on the Great Bombay textile strike, which began on 18 January 1982 under Datta Samant.
    • Nearly 2.5 lakh workers of about 65 mills came out, and the stoppage ran into 1983.
    • It ended without concessions, and many mills closed or moved out of the city.

Gujarat

  • Second in yarn and cloth and in number of mills in the older tables: over 33% of mill cloth, over 8% of yarn and 118 mills.
  • Ahmedabad is the second-largest centre, with 73 mills in those counts. Its advantages:
    • Nearness to the main cotton belt
    • A humid climate
    • Cheap power and skilled labour from nearby
    • Rail and road links
    • Cheaper land than Mumbai
    • Cheap cloth for a mass market
  • Other centres: Surat, Bharuch, Vadodara, Bhavnagar, Khambhat, Rajkot, Kalol, Porbandar, Morbi, Viramgam, Sidhpur and Kadi.

Tamil Nadu

  • Largest number of mills (439 in older counts), mostly small. It gave only about 6% of mill cloth but over 44% of India’s yarn.
  • Coimbatore, with about 200 of these mills, is the Manchester of South India.
  • Other centres: Chennai, Madurai, Tirunelveli, Thoothukudi, Tiruchirappalli, Salem and Perambur.

Other States

StateCharacterCentres
Uttar PradeshWest of the State, where most of its cotton grew; 52 mills in older countsKanpur (Manchester of Uttar Pradesh), Modinagar, Moradabad, Aligarh, Agra, Etawah, Meerut, Ghaziabad, Varanasi, Bareilly, Saharanpur, Rampur, Lucknow, Mirzapur
West BengalLarge market, coal, port; far from cottonKolkata, Haora, Sodepur, Serampore, Shyamnagar, Murshidabad, Hugli, Panihati; North 24 Parganas
Madhya PradeshWestern Malwa cotton tract, local coal, cheap labourGwalior, Indore, Ujjain, Dewas, Bhopal, Jabalpur, Ratlam
ChhattisgarhNow a separate StateRaipur
KarnatakaBengaluru, Ballari, Mysuru, Davanagere, Belagavi, Mangaluru, Chitradurga, Kalaburagi, Channapatna
Andhra PradeshGuntur, East Godavari, Udayagiri, Tirupati
TelanganaCotton-growing areasHyderabad, Secunderabad, Warangal, Ramagundam
KeralamAluva, Kochi, Alappuzha, Alagappanagar, Thiruvananthapuram, Kollam, Thrissur
RajasthanKota, Jaipur, Jodhpur, Ganganagar, Bhilwara, Pali, Beawar, Vijaynagar, Kishangarh, Udaipur, Ajmer
HaryanaHisar, Bhiwani, Rohtak
PunjabRising cotton State; Bt cotton and research on better varietiesAmritsar, Ludhiana, Phagwara
BiharGaya, Patna, Bhagalpur
DelhiHuge marketDelhi
  • Mega clusters bring raw material, design, technology, infrastructure and marketing support to weavers and artisans, including self-help groups:
    • Handloom: Varanasi, Sivasagar, Murshidabad, Virudhunagar
    • Handicraft: Moradabad, Narsapur, Bhadohi–Mirzapur, Srinagar, Jodhpur
    • Powerloom: Bhiwandi, Erode, Bhilwara

Technical Textiles and Exports

  • Technical textiles are products used for their performance rather than appearance, in aerospace, shipping, sports, agriculture, defence, medicine and manufacturing.
    • The older Scheme for Growth and Development of Technical Textiles (2007-08) was followed by the National Technical Textiles Mission.
    • Older market figures: about USD 136 billion globally, and Rs 70,151 crore in India in 2012-13.
  • Export growth: garments drove the rise in cotton textile exports, and made up over 62% of them by 2013-14. Indian textiles reached more than a hundred countries.
YearYarn, fabrics, made-ups (Rs crore)Ready-made garments (Rs crore)Total (Rs crore)
1960-6165166
1980-81408550958
2000-0116,03025,47841,508
2013-1453,91490,4021,44,316
  • All textiles and apparel, including handicrafts: USD 37.75 billion in 2024-25, up from USD 35.87 billion a year before.
    • In rupees: Rs 3,19,573 crore in 2024-25 and Rs 3,25,339 crore in 2025-26.
  • Markets: the USA and European Union take about 47%, down from about two-thirds in older figures.
    • Others include China, the UAE, Sri Lanka, Saudi Arabia, South Korea, Bangladesh, Turkey, Brazil, Hong Kong, Canada and Egypt.

Problems of the Industry

  • Raw material:
    • The industry depends heavily on raw cotton, and mills in areas of small output suffer most.
    • Rising cotton prices push up the cost of production substantially.
    • Long-staple shortage forces imports. The older sources were Pakistan, Kenya, Uganda, Egypt and the USA.
      • Older hopes of easier cotton from Pakistan have closed: India prohibited all imports from Pakistan on 2 May 2025.
      • Trade figures: imports of 6.73 lakh bales and exports of 26.24 lakh bales in 2023-24, up to June 2024.
      • Duty on raw cotton was waived from August to December 2025.
    • Responses: the industry has been set up in traditionally non-cotton belts. Bt cotton and research on better varieties have spread, with Punjab among the gainers.
    • Productivity: India ranks 36th in cotton yield despite the largest area, the gap behind the Mission for Cotton Productivity.
  • Power:
    • Power cuts and load shedding hurt the industry badly, as they do industry in general.
    • Answers: mega power plants, new hydroelectric plants, private power and more energy-efficient technology.
  • Obsolete machinery:
    • Many mills are old, which brings high costs and poor quality.
    • In older figures, 60–75% of machinery was 25–30 years old, and only 18–20% of looms were automatic, against 100% in Hong Kong and the USA, 92% in Sweden and 45% in China.
    • Hurdles to change: shortage of capital, and labour’s resistance to automation, which displaces workers.
    • Responses: older subsidies of 75–100% for modernisation, and the Technology Upgradation Fund Scheme.
    • China shows the way on modern technology and low costs.
  • Labour:
    • Low productivity: a worker in India handled about 2 looms, against 30 in Japan and 60 in the USA. With American productivity at 100, the index stood at 51 for the UK, 33 for Japan and 13 for India.
    • Strikes: frequent, of which Mumbai in 1982 was the longest.
    • Reforms: voluntary retirement schemes, training and rehabilitation, under second-generation reforms.
  • High cost and foreign competition:
    • Low productivity and high costs keep Indian cloth dear, a paradox in a country of low wages and home-grown cotton.
      • The wage advantage is offset by raw material and outdated machinery.
    • China, Taiwan and South Korea use the latest machinery.
  • Sick mills:
    • Competition and the problems above have made many mills sick, with low profits pushing some to close, and closures leaving workers unemployed.
    • Older counts: 177 mills sick and 483 closed.
    • The National Textile Corporation (1968) took over 125 sick mills.
  • Competition from the decentralised sector:
    • The excise concessions and other privileges given to small units have hurt the mill sector.
  • Synthetic fibres and duties:
    • Durable and cheap synthetics draw poorer buyers away from cotton.
    • Heavy excise and duties on imported cotton have added to costs and hurt sales abroad.
  • Foreign investment: these challenges have kept foreign investors cautious.
    • Cumulative FDI in textiles was about USD 4,473 million from January 2000 to March 2024.
ProblemEffect
Scarcity of raw cottonImport of raw cotton
Obsolete machineryLow productivity, inferior finished product
Erratic power supplyLower efficiency, lost production
Stiff competition from synthetics and importsLoss of competitiveness
Loss of foreign marketsLower foreign exchange earnings

New Patterns

  • Specialisation: mills are encouraged to concentrate on spinning, while small units and handloom cooperatives specialise in weaving.
  • The decentralised sector matters more and more in fabric.
  • Mills and handlooms once competed and are now becoming interdependent.
  • Policy now favours large integrated parks and clusters.

Key Advantages

  • Raw cotton: India grows it on the largest area in the world, which gives an edge in low-cost sourcing.
  • Wages: the average wage was 50–60% lower than in developed countries in older comparisons, which helps India gain from outsourcing in garments and home textiles.
  • Design and fashion: these strengthen relations with global retailers and help against Chinese rivals.
  • Value chain: facilities exist from spinning to garments, with investment going into technology and capacity.
  • Large firms such as Arvind Mills, Welspun India, Alok Industries and Raymond have become volume producers in the world market.

Recent Schemes

SchemeFeatures
Amended Technology Upgradation Fund SchemeCredit-linked capital subsidy for technology, supporting exports through Make in India with Zero Effect, Zero Defect; budget Rs 17,822 crore
Scheme for Integrated Textile Parks (2005)World-class common facilities such as roads and power. Older count: 14 of the first 40 parks complete and 13 operating. December 2025: 50 sanctioned, 30 complete, 20 ongoing
North-East Region Textile Promotion SchemeInfrastructure, skills and marketing; Apparel and Garment Making Centre at Bodhjungnagar, Agartala
SAMARTHSkills across the value chain except organised spinning and weaving
PM MITRA ParksSeven parks, Rs 4,445 crore up to 2027-28
Production Linked IncentiveRs 10,683 crore for man-made fibre apparel, fabrics and technical textiles
National Technical Textiles MissionRs 1,480 crore, 2020-21 to 2025-26
Textile Cluster Development SchemeIntegrated workspaces for units and clusters; Rs 853 crore
  • SAMARTH began for 2017-18 to 2019-20 as a demand-driven, placement-oriented scheme under the National Skills Qualification Framework.
    • It requires tracking after placement and offers concessional credit under Pradhan Mantri MUDRA Yojana for self-employment.
    • By 19 March 2025, about 3.82 lakh people had been trained and 2.97 lakh placed.
  • PM MITRA sites: Virudhunagar (Tamil Nadu), Warangal (Telangana), Navsari (Gujarat), Kalaburagi (Karnataka), Dhar (Madhya Pradesh), Lucknow (Uttar Pradesh) and Amravati (Maharashtra).
    • Infrastructure works worth Rs 2,590.99 crore had begun by early 2026.
  • Cotton initiatives: Kasturi Cotton Bharat for branding and traceability, the Kapas Kisan app for procurement, and a five-year Mission for Cotton Productivity, with extra-long staple in focus.
  • Union Budget 2026-27: an Integrated Programme covers a National Fibre Scheme, a Textile Expansion and Employment Scheme, a National Handloom and Handicraft Programme, the Tex-Eco Initiative and Samarth 2.0, along with Mega Textile Parks in challenge mode.
  • Export support: the Rebate of State and Central Taxes and Levies (2019) refunds embedded taxes on garments and made-ups.

Geography Optional Courses

guest
5 Comments
Oldest
Newest Most Voted
Soonm

Nice

unknown

thank you

Shanaya

Superb..
And thankyou

Sheetal

I really like your content.i follow this site since 5 years..it always enrich my knowledge

Aradhana

Amazing content loved it …
😍