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The cotton textile industry is one of the oldest and most influential sectors in the global textile landscape. Renowned for producing breathable, durable, and natural fabrics, this industry supports various applications from everyday clothing to medical and industrial textiles. It is crucial in manufacturing-driven economies, generating employment, exports, and sustainable materials.
Among global players, India’s cotton textile industry stands out for its scale, heritage, and economic impact. With roots tracing back to the Indus Valley Civilization, India’s relationship with cotton has evolved from traditional handlooms and khadi to high-tech, integrated textile mills. Today, India ranks among the largest producers, consumers, and exporters of cotton and cotton-based products worldwide.
This sector forms the backbone of the textile industry in India, contributing significantly to GDP, foreign exchange earnings, and rural employment. From spinning yarn to weaving premium fabrics, Indian cotton textiles serve domestic and international markets. As the demand for eco-friendly textiles rises, India’s cotton industry is poised to expand further, reinforcing its global prominence.
The cotton industry in India has a legacy that dates back thousands of years, making it one of the oldest textile traditions in the world. From the looms of the Indus Valley Civilization to the spinning wheels of the freedom movement, cotton has played a central role in India’s social and economic fabric. This section explores the journey of the cotton textile industry in India through ancient, colonial, and modern times.
India’s cotton textile industry has roots stretching back over 4,000 years. Evidence from the Indus Valley Civilization (circa 2500 BCE) reveals that cotton was cultivated, spun, and woven into cloth. India was one of the first regions in the world to master cotton processing, and its fabrics were traded extensively with ancient civilizations such as Mesopotamia and Egypt.
These textiles, known for their softness, durability, and craftsmanship, were highly valued in international markets. Traditional techniques like handloom weaving, dyeing, and block printing originated in this era and laid the foundation for India’s enduring textile culture.
During British colonial rule, the cotton industry in India underwent significant change. The British extracted raw cotton from India and sent it to British mills, importing the finished products into Indian markets. This devastated local weavers and handloom artisans. In response, the Swadeshi Movement led by Mahatma Gandhi encouraged using khadi, hand-spun and hand-woven cotton cloth, as a symbol of resistance and self-sufficiency.
After independence in 1947, India focused on rebuilding its textile economy. The government established spinning mills, cooperatives, and textile parks, encouraging urban and rural textile development. Policies were crafted to promote modernization, increase employment, and reduce import dependency.
The cotton textile sector pioneered industrialization in India, particularly in cities like Mumbai and Ahmedabad. It laid the groundwork for developing related industries, such as transportation, finance, and trade, cementing its legacy as a key driver of India’s industrial and economic history.
India’s cotton textile industry is a global leader in production and employment. Its current status reflects a blend of traditional strengths and modern advancements.
The cotton textile industry in India continues to be a vital pillar of the country’s industrial and economic landscape. India is the largest producer of cotton in the world and the second-largest exporter of cotton textiles, after China. This sector plays a critical role in employment generation, offering direct jobs to over 45 million people and indirect livelihoods to nearly 60 million, making it the second-largest employer in the country after agriculture.
Regarding economic contribution, the cotton textile industry accounts for about 7% of India’s total industrial output by value and nearly 11% of its total exports, highlighting its importance to domestic production and foreign trade. The industry supports thousands of units, ranging from handlooms and power looms to large composite textile mills.
According to the Ministry of Textiles, India produced over 35 million bales of cotton during the 2023–24 season. Cotton remains the backbone of the broader textile industry in India, contributing approximately 2.3% to India’s GDP and 13% to overall industrial production. Cotton textiles dominate domestic and international demand among all fabric types due to their comfort, versatility, and sustainability.
The cotton textile industry is deeply interconnected with India’s agrarian and industrial economies. Over 6 million cotton farmers rely on this sector for income through raw cotton sales. On the manufacturing side, the industry fuels urban industrial growth and boosts India’s global export competitiveness. With growing demand for natural and eco-friendly fabrics, cotton textiles are increasingly favored globally, further solidifying India’s role in the international textile arena.
India’s cotton textile industry is highly diversified, producing various products catering to domestic and international markets. These products form the foundation of the textile industry in India, supporting fashion, furnishing, and industrial applications.
Cotton yarn is the starting point of the cotton textile value chain. India is a leading combed and carded yarn producer, available in various counts to suit different end uses. This yarn is extensively used in weaving and knitting, supplying raw material for fabric production across the country and abroad.
India manufactures an array of woven and knitted fabrics using power looms, automatic looms, and handlooms. These fabrics are widely used in garments, upholstery, and industrial products. The coexistence of modern and traditional production methods enables the industry to meet diverse consumer demands in a high-end and budget-friendly way.
India is one of the largest organic cotton producers, responding to global demand for sustainable textiles. Blended fabrics such as cotton-polyester combine cotton’s breathability with synthetic fibers’ strength and affordability.
Indian cotton textiles are in high demand across segments, fashion, home décor, and industry, and they have major export destinations in the USA, EU, UAE, Bangladesh, and China.
Also Read: Explore India’s finest handwoven fabrics
India’s textile industry is one of the largest in the world. It is renowned for its vast cotton production and skilled labor force. With strong global demand and government support, India is fast becoming a contender for the biggest textile industry title.
China is currently the undisputed leader in the global textile industry, renowned for its massive scale, advanced automation, and highly efficient manufacturing processes. It dominates the production of synthetic fibers and finished garments, serving a vast global market. However, India holds distinct advantages regarding cotton production and traditional textiles.
India boasts the largest cotton cultivation area in the world, ensuring a steady and abundant supply of raw material. The country’s vast and skilled labor force, especially in the handloom and powerloom sectors, offers a unique diversity in textile production that China’s highly mechanized industry cannot easily replicate. Additionally, India benefits from a low-cost workforce, which is attractive to textile manufacturers and exporters.
India’s cotton textile industry thrives on several strengths:
India’s position on the global textile map is reinforced by:
Together, these factors position India as a formidable contender in the global cotton textile industry, with the potential to challenge China’s dominance in the coming years.
India’s cotton textile industry is concentrated in several key regional hubs, each with unique specialization and strengths.
Gujarat is often called the “Textile Capital of India” due to its dominance in denim production and many spinning mills. Cities like Ahmedabad and Surat are famous for producing high-quality denim fabrics that supply domestic and international markets. Gujarat’s infrastructure and skilled workforce make it a cotton yarn and fabric manufacturing leader.
Maharashtra is another important hub, with cities like Mumbai and Nagpur housing numerous composite textile mills that integrate spinning, weaving, and processing. The state is also a central cotton-growing region, providing raw material close to its manufacturing units.
Tamil Nadu is a powerhouse in textile production, hosting over 45% of India’s spinning mills. Coimbatore, often called the “Manchester of South India,” is renowned for its large-scale textile manufacturing, particularly cotton yarn and fabrics. The state excels in both traditional and modern textile production techniques.
Punjab and West Bengal contribute distinctively to the cotton textile sector. Punjab specializes in cotton blending and knitting, catering to the garment industry, while West Bengal is famous for producing fine cotton sarees and delicate fabrics, maintaining rich handloom traditions.
These regional centers collectively sustain India’s position as a leading cotton textile industry.
The cotton textile industry in India plays a crucial role in the nation’s economic and social fabric, impacting millions of lives and contributing significantly to economic growth.
The industry is one of the largest employment generators in India, directly and indirectly supporting over 100 million people. Its labor force spans multiple stages—from cotton farming and ginning to spinning, weaving, dyeing, and retail. Notably, women form a substantial part of this workforce, especially in the handloom and rural textile sectors, where they work in spinning, weaving, and embroidery. Gender-inclusive employment helps empower rural households by providing steady incomes and supporting livelihoods, thereby contributing to poverty alleviation and social development.
The cotton textile industry contributes approximately 2.3% to India’s GDP and about 13% to its industrial production, making it a vital economic sector. On the export front, India earns over $15 billion annually from cotton textile products, including yarn, fabrics, and garments. These exports generate valuable foreign exchange reserves and strengthen India’s position in global textile trade. The sector’s strong export performance helps balance trade deficits and promotes economic stability.
The backbone of the cotton textile ecosystem comprises micro, small, and medium enterprises (MSMEs), along with thousands of self-help groups and artisan communities. These entities contribute significantly to production, innovation, and employment generation. Government initiatives such as the Technology Upgradation Fund Scheme (TUFS), export incentives, and capacity-building programs aim to modernize these units and enhance their competitiveness.
Together, the cotton textile industry drives economic progress and promotes social equity and cultural continuity across India.
Despite its strengths, the cotton textile industry in India faces several significant challenges that hinder its growth and global competitiveness.
One of the most pressing issues is the volatility of raw cotton prices. Prices fluctuate due to unpredictable monsoon rains, global cotton demand, and speculative trading. This instability creates uncertainty for textile mills and manufacturers, making it difficult to maintain consistent production costs and pricing strategies. As raw cotton accounts for a large portion of the overall cost, price swings directly impact profitability and planning.
Many small and medium textile units struggle with outdated machinery and technology. Lack of access to modern, efficient equipment reduces productivity, fabric quality, and energy efficiency. While large mills have started adopting automation and advanced techniques, a significant part of India’s cotton textile production still relies on traditional or semi-mechanized processes, limiting scale and competitiveness.
The rising popularity of synthetic and blended fabrics, often cheaper and more durable, poses stiff competition. Synthetic textiles have gained market share in domestic and international markets, challenging cotton’s dominance. Although cotton remains favored for its natural qualities, synthetic alternatives’ cost advantages and performance benefits make them attractive, especially in fast fashion.
Labor challenges persist in the cotton textile sector, including irregular wages, lack of formal contracts, and poor working conditions, particularly in informal units. Additionally, many textile dyeing and finishing processes are environmentally unsustainable, involving heavy water use and chemical pollution. These issues raise concerns about the industry’s long-term viability, pressuring manufacturers to adopt greener, fairer practices.
Addressing these challenges is crucial for India to sustain and grow its cotton textile industry in a competitive global environment.
The Indian government has implemented several policy initiatives to support and enhance the competitiveness of the cotton textile industry in India. These measures address challenges related to modernization, raw material procurement, export promotion, and skill development.
One of the most impactful schemes is the Production Linked Incentive (PLI) Scheme, which encourages the production of high-value textiles such as man-made fabrics and technical textiles. This helps upgrade India’s textile product mix and enhances global competitiveness.
Another key policy is the Technology Upgradation Fund Scheme (TUFS). It provides financial support through capital subsidies to encourage modernization and reduce dependence on outdated machinery, especially for small and medium textile enterprises.
The government provides a minimum support price (MSP) for cotton farmers to ensure a steady supply of raw materials and protect them from market fluctuations. Additional assistance includes improved irrigation facilities, access to high-yield seeds, and support for sustainable cotton cultivation.
On the manufacturing side, skill development programs help train workers in modern techniques and equipment usage, improving productivity and employability across the industry.
Duty drawback schemes, tax rebates, and other fiscal incentives boost India’s export competitiveness. Organizations like TEXPROCIL (Cotton Textiles Export Promotion Council) play a key role in facilitating international trade by organizing trade fairs, buyer-seller meets, and market intelligence services.
These government policies collectively support the growth, sustainability, and global positioning of the textile industry in India, especially in the cotton segment, which remains its backbone.
The cotton textile industry in India is gradually embracing technology to improve efficiency, quality, and sustainability. While the transition is ongoing, several key innovations shape the sector’s future.
Automation is gaining traction, especially in large and mid-sized mills. Technologies like smart looms, ERP systems, and AI-powered inventory management tools are streamlining operations. These solutions help reduce waste, optimize production cycles, and improve turnaround time, making the sector more competitive globally.
Environmental concerns have driven innovation in sustainable production methods. Indian textile units are adopting waterless dyeing techniques, solar-powered energy systems, and eco-friendly processes. The rise in organic cotton certification reflects a growing awareness about ethical sourcing and low-impact farming, appealing to domestic and international consumers.
The demand for innovative and functional textiles is increasing. Indian manufacturers produce anti-bacterial fabrics, UV-resistant cotton, and moisture-wicking sportswear, catering to sectors like healthcare, defense, and activewear.
Startups like ReshaMandi and TextilesGreen are bridging the gap between technology and traditional practices. They offer solutions for supply chain digitization, quality tracking, and sustainable sourcing, empowering farmers and weavers to access better markets and improve margins.
These innovations are essential for the textile industry in India to stay globally relevant and environmentally responsible.
The future of the cotton textile industry in India appears promising, driven by favorable market trends, rising consumer demand, and government support. As domestic and international markets evolve, the sector is poised for robust growth and transformation.
According to industry analysts, the Indian cotton textile industry is projected to grow at a compound annual growth rate (CAGR) of 7–9% between 2025 and 2030. This growth will be fueled by rising urbanization, increased fashion consciousness, and expanding retail infrastructure. India’s share in global cotton textile exports is also expected to rise, supported by trade agreements, supply chain diversification, and competitive pricing.
While exports remain a key growth driver, especially to markets such as the USA, EU, and Southeast Asia, domestic consumption is expected to rise significantly. Factors like higher disposable income, fast fashion trends, and greater awareness of homegrown brands encourage Indian consumers to buy more cotton-based products. The demand spans clothing, home textiles, and wellness-focused fabrics like organic cotton.
A significant opportunity lies in green and sustainable manufacturing. With the global apparel market shifting towards eco-conscious production, India has a natural advantage due to its organic cotton output and low-carbon manufacturing potential. Investing in green certifications, wastewater treatment, and solar energy integration can help manufacturers tap into premium markets and meet stringent environmental regulations.
As global buyers look for ethical, traceable, and environmentally sound textile sourcing options, India’s cotton textile industry is well-positioned to lead the way. It continues to invest in innovation, sustainability, and quality enhancement.
The cotton textile industry in India stands at a transformative juncture. Rooted in centuries of craftsmanship and culture, it continues to be a vital contributor to the textile industry in India and the broader economy. With robust government initiatives, a strong raw material base, and growing technological integration, India is well-positioned to emerge as the most significant textile industry in the world.
However, for the industry to sustain long-term growth, challenges such as raw material volatility, outdated technology, and environmental concerns must be actively addressed. Embracing sustainable practices, investing in green manufacturing, and modernizing infrastructure will be critical for global competitiveness. As India crafts its economic future, the cotton textile sector remains a powerful symbol of resilience, tradition, and innovation. It is not just a fabric of commerce, but a living testament to India’s enduring spirit and promise on the world textile stage.
Maharashtra, especially Mumbai, is called the “Cottonopolis of India.” It hosts India’s largest cotton textile industry. With around 60 mills, Mumbai leads in production, and the state has the country’s highest number of cotton textile mills.
Although it’s hard to name a single top textile city in India, Surat in Gujarat is a central hub. Renowned for synthetic fabrics and sarees, it’s often called the “Textile City of India” for its prominence.
Mumbai, known as the “Cottonopolis of India,” is famed for its prominent cotton textile industry. Ahmedabad and Coimbatore also play key roles, contributing significantly to India’s cotton textile sector with their rich industrial heritage and manufacturing capacity.
Ahmedabad, often called the “Manchester of India,” is widely regarded as the cotton capital of India due to its thriving cotton textile industry. The city is renowned for its historic mills and significant contribution to India’s textile production.
Mumbai’s first cotton mill, the Bombay Textile Mills, was established in Tardeo in 1854 by local industrialist Cowasji Nanabhai Davar. This marked the beginning of the city’s rise as a major center in India’s cotton textile industry.
Authored by, Amay Mathur | Senior Editor
Amay Mathur is a business news reporter at Chegg.com. He previously worked for PCMag, Business Insider, The Messenger, and ZDNET as a reporter and copyeditor. His areas of coverage encompass tech, business, strategy, finance, and even space. He is a Columbia University graduate.
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