Cotton Textile Industry In India

Cotton textile industry in india

India is known worldwide for its production of textiles in general, and cotton in particular, both being major industries for the country. Indian textile industry is the mother of all industries and is among the world‟s top producers of yarns and fabrics. Textile industry is one of the largest and oldest industry in India. Chinese first started using water driven mechanical devices for spinning in 12th century and Industrial Revolution in Britain had its beginning in the textile industry.

The textile industry plays a crucial role in the Indian economy. It accounts for over 14 percent of industrial production and is closely linked with the agricultural and rural economy. It is the single largest employer in industrial sector .

Historical background

India is known for its textile products from the days when use of mordant dyes and printing blocks was in practice around 3000BC. The variety of fibres found in India, weaving patterns and its organic dyes has fascinated customers from all over the world for centuries.

Since BC 1500 to AD 150, country was famous for its handiwork on cotton fabrics. The muslin of Dhaka, Calicos of Calicut and embroidered cotton work of Surat and Vadodara were famous in the world for their fine quality, design and pattern. But the handmade cloth of India could not compete with the machine made cloth of UK. The Industrial Revolution had brought in new methods of fabrication and invented textile machines and techniques of spinning and weaving. The English inventions revolutionized textile manufacturing by way of producing cheap cloth and in large quantities.

Structure of textile industry

The textile sector in India is one of the world largest. The production of textiles is structured across the organized mill sector and unorganized decentralized sector. The organized mill sector consists of spinning mills or composite mills. Composite mills are those where all the activities, i.e., spinning, weaving and processing are performed in the same building. Weaving is done in unorganised decentralized sector and consists of powerloom, handloom and hosiery units. Apart from this, readymade garments, khadi and carpet manufacturing units are also included in the decentralized sector (Balaji, 2008). In general, the textile industry is classified into three segments: Cotton Textiles, Synthetic Textiles and others like Wool, Jute, and Silk etc.

All segments of the textile industry have their own significance but cotton textiles lead with 73% share. Even, the consumption of cotton fibre/yarn in relation to other fibres/yarn in India is 54: 46 thus making it predominately a cotton based industry. While the global consumption of fibres/yarn is 40:60 in favour of non-cotton fibres/yarn.

The structure of cotton textile industry ranges from hand spinning and hand weaving to most sophisticated automatic spindles and looms. The textile value chain extends from raw material (fibres) to finished products (clothing and made-ups) with spinning, weaving, knitting and processing coming in between as intermediate processes.

Importance of textile industry in Indian economy

The Indian textile industry has a significant presence in the economic life of our country. It is the second largest textile industry in the world after China. The textile industry contributes about 14% to the country’s industrial output and about 17% to export earnings. After agriculture, this industry is the second largest employer in India employing 45 million people. Besides, another 60 million people are engaged in allied activities.

The name “white gold” given to cotton has emphasised its significance in Indian economy since a long time. It is the backbone of Indian economy being the employer of millions of rural workforce and has resulted in the expansion of manufacturing activities.

India is the largest producer of Jute, the 2nd largest producer of Silk, the 3rdlargest producer of Cotton and Cellulosic Fibre/Yarn and 5th largest producer of Synthetic Fibres/Yarn. Textile Industry contributes around 4% of GDP, 9% of excise collections, and has 11 % share in the country‟s export. India is the largest exporter of yarn in the international market and has a share of 25% in world cotton yarn export market.

challenges of cotton textile industry in india

Although cotton textile is one of the most important industries of India, it suffers from many problems. Some of the burning problems are briefly described as under:

Scarcity of Raw Cotton

Indian cotton textile industry suffered a lot as a result of partition because most of the long staple cotton growing areas went to Pakistan. Although much headway has been made to improve the production of raw cotton, its supply has always fallen short of the demand. Consequently, much of the long staple cotton requirements are met by resorting to imports.

Obsolete Machinery

Most of the textile mills are old with obsolete machinery. This results in low productivity and inferior quality. In the developed countries, the textile machinery installed even 10-15 years ago has become outdated and obsolete, whereas in India about 60-75 per cent machinery is 25-30 years old.

Only 18-20 per cent of the looms in India are automatic whereas percentage of such looms ranges from cent per cent in Hong Kong and the USA., 99 per cent in Canada, 92 per cent in Sweden, 83 per cent in Norway, 76 per cent in Denmark, 70 per cent in Australia, 60 per cent in Pakistan and 45 per cent in China.

Erratic Power Supply

Power supply to most cotton textile mills is erratic and inadequate which adversely affects the production.

Low Productivity of Labour

Labour productivity in India is extremely low as compared to some of the advanced countries. On an average a worker in India handles about 2 looms as compared to 30 looms in Japan and 60 looms in the USA. If the productivity of an American worker is taken as 100, the corresponding figure is 51 for U.K. 33 for Japan and only 13 for India.


Labour strikes are common in the industrial sector but cotton textile industry suffers a lot due to frequent strikes by a labour force. The long drawn strike in 1980 dealt a severe below to the organised sector. It took almost 23 years for the Government to realise this and introduce legislation for encouraging the organised sector.

Stiff Competition

Indian cotton mill industry has to face stiff competition from powerloom and handloom sector, synthetic fibres and from products of other countries.

Sick Mills

The above factors acting singly or in association with one another have resulted in many sick mills. As many as 177 mills have been declared as sick mills. The National Textile Corporation set up in 1975 has been striving to avoid sick mills and has taken over the administration of 125 sick mills. What is alarming is 483 mills have already been closed.


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