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.

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.

• 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)

• 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.

• 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.

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.

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

• 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.

• 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.

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

• 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.