Indian Textile Industry: Investment, Opportunities, Challenges and Suggestions 2021

With a market value of nearly US $140 billion in 2017, India's textile is estimated to value more than US$ 209 billion by 2029.
Indian Textile Industry: Investment, Opportunities, Challenges and Suggestions 2021

The Indian textile industry is many centuries old consisting of various sectors from hand-spun and hand-woven to mills sector and is the 2nd largest producer of garments in the world. The industry produces a great variety of products and has been providing employment to about 100 million people in the country.

Indian textile industry is one of the most unique industries with its ancient techniques and cultural traditions. With a market value of nearly US $140 billion in 2017, India's textile is estimated to value more than US$ 209 billion by 2029. Due to the pandemic, there was a notable downslide in the market but as the pandemic comes to an end, the Indian textile market is predicted to recover and grow at 10 percent CAGR from 2019 to 2026 to rise and reach US$ 190 billion. The country's textile industry has been a great contributor to the country. In 2019 the industry contributed 7 percent to the industry output. The exports of cotton, handloom, yarn products, etc., increased by more than 50 percent in June 2021.


This highly diversified industry has seen a jump in investments.  India's textile export in 2020, was valued at US$ 20.5 billion. From April 2000 to December 2020 the industry attracted US$ 3.75 billion worth of FDI (Foreign Direct Investment). 

In the last five years, the industry has attracted FDI's and many other investments. In May 2021 itself, the ICIL stated an investment of US $2.6 million. The government of India has allowed 100 percent automation under the automatic route. Many more investments from FBB (Fashion at Big Bazaar), Raymond, Max Fashion, etc., and schemes like Scheme for Capital Building (SCBTS), Production-linked Incentive (PLI) are helping to boost the production and increase exports in the industry. India’s textile industry is expected to attract investments worth US$ 120 billion and increase the export of products to US$ 300 billion by 2025.


The textile industry in India is very strong as it has a variety of natural and man-made fibres and yarns. India’s textile industry plays a technological and capital-intensive role and is compared with industries like heavy machinery, automobiles etc. Since the pattern of industrialisation in trade has become common in consumer goods industries and labour-intensive industries there is immense opportunity in the textile industry. 

India is estimated to be the second most appealing market by the year 2025 contributing up to US$ 121billion whereas China has been estimated to be the biggest appealing market contributor by adding US$ 378 billion by the year 2025. 

India has one of the fastest-growing economies with the GDP increasing to 7.2 percent in the year 2017- 2018. This creates a boost in the purchasing power of the people while it also spurs the demand for products of the textile industry. This boost results in a wide range of capacity to manufacture different products that can be transported within India as well as across the world. 

Apart from this, India has one of the most extremely varied textile sectors as it has hand-woven textiles on one end while capital intensive mills on the other end which results in an enormous number of opportunities in the textile industry.


Though there are many opportunities and investments in the textile industry, like any other industry, the textile industry of India also undergoes certain challenges. The frequently changing policies stated by the government at the central and state levels create immense pressure on the textile industry. The GST applied on the products make the garments and clothes even more expensive. 

Another challenge that the textile industry faces is the limitation to access the latest and best technology while also failing to meet the global standards in the competitive export market. Apart from these issues like child labour, competition from neighbouring countries regarding low-cost garments, personal safety norms are some of the challenges the Indian textile industry faces. 


To overcome the challenges and to reach the estimated global market goal the textile industry of India needs to take into some changes and implementations to boost the textile industry even further. One of the implementations is increasing focus on technology upgradation and increasing the weaving capacity in order to increase productivity. The state government should provide approval for the treatment of effluent plants to upscale the business market.

Receiving support from both the central as well as state governments will help the Indian textile industry to flourish at a great height. Some of the other suggestions that the Indian textile industry need to take into consideration are training their workforce to meet the changing demands of the modern market world, reducing the taxes imposed on the exported products that are subsided by the government.

Apart from this, enabling a proper supply of gas is also very important to maintain the function of the textile industry. Creating capital subsidy, providing one window solution to resolve the industry problems, enabling a fixed price on yarn for a yearly basis will create a smooth flow of work and will also benefit the poor farmers of the nation. 

With the increase in disposable income, the demand for products in the Indian textile industry has increased creating a huge demand in the domestic as well as the international market. And so, the major growth in the retail sector, investments and the right support from the government India's textile industry holds a favourable future.

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