India’s Textile Sector: From Glory to Global Comeback

Syllabus- Economy [GS Paper-3]

20/07/2026

16 3 minutes read

India’s Textile Sector: From Glory to Global Comeback UPSC

Context

The value chain of textiles is a very significant employment and export opportunity in India, which has historically been the largest market for textiles globally, but needs institutional and technological reforms to be competitive again.

Key Highlights

India has a long history of textiles and was previously a major exporter of textiles.
Textile making, spinning and dyeing are traces of the Harappan civilization in India, which dates back almost 4,500 years.
But with the advent of the Industrial Revolution, technology, productivity, and economies of scale took over as the factors to determine global competitiveness in India and other countries.
The task today is to turn the might of Indian textiles into a globally competitive and employment-intensive sector through better institutions.

India’s Historical Textile Dominance

For almost 2000 years, Indian textiles were traded extensively within Asia and Europe.
In Mughal era, Bengal turned into a leading centre of cotton cloth production in the world.
The muslin of Dhaka was of the finest and most popular type of muslin in the world.
Murshidabad became an important centre of silk and muslin production.
Indiana’s contribution to world output was an astonishing 23.5% in 1700 (Angus Maddison’s estimates).
This reflects the then-strength of manufacturing and commercial capabilities of India.

The Industrial Revolution and India’s Decline

The Industrial Revolution had a profound impact on the foundations of industrial competitiveness.
The spinning jenny and other mechanised technologies transferred the advantage from the artisanal skill to technology and mass production.
Indian textile factories were not able to produce on a competitive basis with the European mechanical textile mills.
India slowly started to supply raw cotton to Lancashire and started to buy British made textiles.
The experience underscores the ability of technological disruption to quickly erode traditional economic benefits.

India’s Present Textile Advantage

India, today, has a complete textile value chain.
The sector relates to cotton cultivation, spinning, weaving, cotton processing, garment making, and export.
India also boasts a huge domestic market and workforce.
The most significant benefit of textiles is that it is an industry with a high employment rate.
The sector has the potential to employ large numbers of women, semi-skilled and rural people.
Hence, textiles play an important role in inclusive growth and the demographic dividend of India.

The Institutional Challenge

Having an integrated value chain does not ensure global competitiveness.
The textile industry in India is beset by the problems of disorganized production, lack of economies of scale and backwardness of the modern textile machinery.
Access to technology, finance and access to global markets can prove to be challenging for small and medium enterprises.
Skill deficits and low investment in research and product/process innovation decrease productivity.
A more conducive institutional environment is also needed for expeditious decision-making, export promotion and coordination between the Centre, states and industry in India.

Way Ahead: Building an Ecosystem for Competitiveness

An ecosystem is needed in India to make textiles more competitive than what is a single subsidy or scheme.
The common infrastructure and logistics, testing laboratories and digital platforms should support textile clusters.
Technology adoption, automation and research in sustainable and smart textiles need to be encouraged in India.
Indian companies can be a constant source of raw materials for foreign brands if they are better integrated into the global value chains.
Government policy should promote scale-up, formalisation and development of labour-intensive garment production.
There is a need for a special focus on women’s employment, skilling and social security.
Institutions should foster collaboration between industry, academia and government institutions to create innovation and access to global markets.

Conclusion

India’s past has proved that the success of its economy requires technological and institutional flexibility as well as resources and skills.
The sector offers an unprecedented opportunity to generate jobs, grow manufacturing and expand exports to India.
India’s heritage of textiles can be transformed into a competitive advantage in the world today with the help of a robust institutional ecosystem.

Source: The Indian Express