Investment, opportunities, challenges and suggestions 2021


The Indian textile industry is centuries old, made up of various sectors from yarn and hand woven to the factory sector and is the 2nd largest producer of clothing in the world. The industry manufactures a wide variety of products and provides jobs for around 100 million people in the country.

The Indian textile industry is one of the most unique industries with its ancient techniques and cultural traditions. With a market value of nearly US $ 140 billion in 2017, Indian textiles are estimated to be worth over US $ 209 billion by 2029. Due to the pandemic, there has been a noticeable decline in the market, but As the pandemic comes to an end, the Indian textile market is expected to recover and grow at a 10% CAGR from 2019 to 2026 to reach US $ 190 billion. The country’s textile industry has been a big contributor to the country. In 2019, the industry contributed 7% of the industry’s output. Exports of cotton, looms, yarns, etc. increased by more than 50% in June 2021.


This very diverse industry has seen a surge in investment. India’s textile exports in 2020 were valued at US $ 20.5 billion. From April 2000 to December 2020, the industry attracted US $ 3.75 billion in FDI (foreign direct investment).

Over the past five years, the industry has attracted FDI and many other investments. In May 2021 itself, the ICIL announced an investment of US $ 2.6 million. The Indian government has allowed 100% automation as part of the automatic route. Many other investments from FBB (Fashion at Big Bazaar), Raymond, Max Fashion, etc., and programs such as Scheme for Capital Building (SCBTS), Production-linked Incentive (PLI) help to stimulate production and increase exports in industry. India’s textile industry is expected to attract investment worth US $ 120 billion and increase product exports to US $ 300 billion by 2025.


The textile industry in India is very strong because it has a variety of natural and man-made fibers and yarns. India’s textile industry plays a technological and capitalistic role and is compared to industries such as heavy machinery, automobiles, etc. As the industrialization model of commerce has become mainstream in consumer goods industries and labor-intensive industries, the textile industry offers immense opportunities. .

India is estimated to be the second most attractive market by 2025, contributing up to US $ 121 billion, while China has been estimated to be the largest attractive market contributor by adding US $ 378 billion to ‘by 2025.

India has one of the fastest growing economies, with GDP reaching 7.2% in the year 2017-2018. This creates an increase in the purchasing power of the population while stimulating the demand for products from the textile industry. This boost translates into a wide range of manufacturing capabilities for different products that can be transported to India as well as across the world.

Apart from that, India has one of the most diverse textile sectors as it has hand woven textiles on one side and capital intensive factories on the other end which results in a huge number of opportunities in the textile industry.


Although there are many opportunities and investments in the textile industry just like any other industry, India’s textile industry also faces some challenges. The frequently changing policies enunciated by the government at central and state levels create immense pressure on the textile industry. The GST applied to products makes clothes and clothing even more expensive.

Another challenge facing the textile industry is limiting access to the latest and greatest technology while failing to meet global standards in the competitive export market. Besides such issues as child labor, competition from neighboring countries for cheap clothing, personal safety standards are some of the challenges facing Indian textile industry.


To overcome the challenges and achieve the estimated goal of the global market, the Indian textile industry needs to undertake certain changes and implementations to further boost the textile industry. One of the implementations is to focus more and more on improving technology and increasing weaving capacity in order to increase productivity. The state government is expected to give its approval for the treatment of effluent treatment plants to improve the business market.

Receiving support from central government and state governments will help the Indian textile industry to flourish to a great height. Some of the other suggestions that the Indian textile industry needs to consider are to train its workforce to meet the changing demands of the modern market, by reducing taxes imposed on exported products which are subsidized by the government.

Apart from this, allowing an adequate supply of gas is also very important to keep the textile industry functioning. Creating capital grants, providing a one-stop-shop solution to solving industry problems, allowing a fixed price on wire for an annual basis will create a smooth workflow and also benefit the nation’s poor farmers.

With the increase in disposable income, the demand for products in the Indian textile industry has increased, creating a huge demand in the domestic and international market. And so, the significant growth of the retail sector, the investments and the good support of the government Indian textile industry has a favorable future.


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