There are around 1982 cotton-fibre and man-made-fibre textile mills in the country as on April 30, 2016, in the organized sector. Textile mills in India have a capacity of around 46.1 million spindles and around 0.6 million rotors as on April 30, 2016.

Production of yarn as a whole reached the level of 5661 million kgs in 2015-16, witnessing a y-o-y increase of 3.2%. Production of fibre was 1347 million kilograms in 2015-16, a y-o-y increase of 0.3%. Production of fibre has been growing consistently after witnessing a year-on-year (y-o-y) decline in 2011-12. Total fabric production was 65860 million sq. metres in 2015-16, registering an increase of 0.9% over the previous year.

The power-loom sector provides a wide variety of fabric, both grey as well as processed fabrics. The estimated 24.69 lakh power-looms in the country are distributed across nearly 5 lakh units, employing nearly 62 lakh workers. During 2015-16, fabric production by Indian power-loom sector witnessed a decline of (-) 1.1% to reach 37346 million sq.mts, of which more than 40% was constituted by cotton fabric. Fabric production by power-loom sector accounted for nearly 57% of the total fabric production in India in 2015-16.

The handloom sector has been playing an important role in creating awareness about Indian cultural diversity and fashion, which is unique. The handloom sector produced nearly 7616 million sq. mts in 2015-16, registering a y-o-y growth of 5.7%.

The hosiery sector in India produced around 17641 million sq.mts of fabric in 2015-16, showing a growth of 4.4% as compared to the previous year. Fabric production by hosiery sector accounted for more than one-fourth of the total fabric production in India.


During FY 2015-16, textiles and readymade garment exports (including carpets) from India amounted to US$ 36.7 billion, witnessing a decline of (-) 2.4% over the previous year. Exports of readymade garments witnessed a y-o-y growth of 0.8% in 2015-16. ‘Articles of Apparel and Clothing Accessories, Not Knitted or Crocheted’ (HS: 62) is the largest category of textile and clothing exports from India. Imports of textiles and garments also registered a decline of (-) 2.7% during the year.

While India’s textiles and garments are exported to more than hundred countries, USA is the largest export destination, accounting for 20.5% of the total textile and garments exports by India in 2015-16, followed by UAE (12.2%), UK (6.5%), Bangladesh (5.7%) and China (5.4%). China was the largest import source for India, with a share of 43% in total imports during 2015-16, followed by Bangladesh (6.8%), USA (5.4%), Australia (3.4%), and Taiwan (3.1%).

The share of textiles and readymade garments in India’s total exports has come down in the last 15 years. In FY 2000-01, the share of textiles and readymade garments (including carpets) in India’s total exports was 25.6%, which has come down to 14% in FY 2015-16. However, India’s share in world exports of textiles has been increasing over the years, from 3.4% in 2000, to 6.3% in 2014, and in case of readymade garments, the share has increased from 3.0% in 2000 to 3.8% in 2014.

Foreign Direct Investments

100 percent FDI is allowed in the textile sector without any prior approval either by the Government of India or Reserve Bank of India. For the period April 2000 to March 2016, the FDI for the textile segment stood at US$ 1,852.47 million which is 0.64 percent of the total FDI inflows in the same period.


Domestic demand for cotton yarn and blended yarn is expected to gain traction during the year ended March 2017. This is likely to be backed by an increase in purchases made by the manufacturers of apparels, home textiles and technical textiles.

Consumption of apparels in the domestic market is expected to rise during the year. A pick up in the economic growth, a projected normal monsoon and the implementation of the seventh pay commission is likely to lead to a rise in income across all the consumer classes. This, along with an aspiration for a better lifestyle, changes in fashion, rapid penetration of organised retail and swift growth of the e-commerce segment is likely to raise the consumption of fabrics and apparels during the year. Besides this, a projected recovery of the real estate sector and improved prospects of the industrial sector will spur the demand for home textiles and technical textiles.

Exports of apparels, home textiles and made-ups, too, are expected to grow at a steady pace in 2016-17. The government is actively taking steps to increase merchandise exports from India. It recently announced a Rs.60 billion special package for the textile sector to boost textile exports from the country. Also, measures announced in the budget are likely to aid the growth in apparel exports.

However, the auction of reserve cotton initiated by China (largest importer of Indian cotton yarn) is likely to impact India’s cotton yarn exports during the year. The release of reserve cotton in the country is likely to reduce the demand for India’s cotton yarn amongst the Chinese textile mills. Therefore, growth in total yarn exports is likely to slowdown.

Demand for man-made filaments and fibres is also likely to revive in 2016-17. This is likely to be backed by an incremental rise in off-take by the fabric and apparel manufacturers, producers of home textiles and technical textiles during the year.



  • A new scheme “Amended Technology Upgradation Fund Scheme (ATUFS)” has been approved by the Government, under which apparel, garment and technical textiles will get 15% subsidy on capital investment, subject to a ceiling of Rs. 30 crore over a period of five years. The remaining sub-sectors will be eligible for 10% subsidy, subject to a ceiling of Rs. 20 crore. Union Budget -2016-17 has allocated Rs. 14.80 billion to ATUFS.
  • The Scheme for Integrated Textile Parks (SITP) was launched in 2005 to provide the industry with State of the art world-class infrastructure facilities for setting up their textile units. In Union budget 2016-17, Rs. 1 billion was allocated under Scheme for Integrated Textile Parks.
  • The customs duty on readymade garments, home textiles, fabrics and cotton yarn is high at 10.3 per cent (Union Budget 2016-17) to protect the indigenous industry from imports. Consequently, there are hardly any imports of readymade garments into India. Further, basic customs duty on specific man-made fibers and yarns has been halved to 2.5% under Union Budget 2016-17.
  • Under Union budget 2016-17, excise duty on branded garments retailing at Rs. 1,000 and above was increased from 0 to 2% (without CENVAT credit) and from 6% to 12.5% (with CENVAT credit). Additionally, tariff value (presumptive) for excise/countervailing duty on readymade garments and other textile materials has been doubled to 60% of retail sale price.
  • Export credit interest subvention: The Reserve Bank of India notified increasing the rate of interest subvention on existing sectors eligible for export credit subvention to 3% from 2% with effect from August 1, 2013. Readymade garments is one of the eligible sectors covered under the benefit.



United States

The Textile Fiber Products Identification Act, the Wool Products Labeling Act, the Fur Products Labeling Act, and Federal Trade Commission require that most textile wool, and fur products have a label or tag disclosing the fiber or fur content, the business name or other identification issued and registered by the Commission of the manufacturer, importer, distributor, or seller, and the country of origin. Wearing apparel must have labels specifying content and instructions for care. All textiles must have either labels indicating the country of origin or, if this is not feasible, (yarn, thread, wool) be packaged in such a way that country of origin is discernable to the ultimate purchaser.

European Union

Textile products may only be placed on the European Union (EU) market provided that they are labelled, marked or accompanied with commercial documents in compliance with Regulation (EU) No 1007/2011 of the European Parliament and of the Council.

The main purpose of the Regulation is to ensure that consumers, when purchasing textile products, are given an accurate indication of their fibre composition.

The placing on the EU market of textile and leather articles containing certain chemical substances, group of substances or mixtures are prohibited or severely restricted, in order to protect human health and environment, according to provisions listed on Annex XVII to Regulation (EC) No 1907/2006 of the European Parliament and of the Council (REACH Regulation).

For further details on Regulations applicable in various geographies, refer to this link: http://www.standardsmap.org/identify