Abstract

The Indian Textile Industry has anoverwhelming presence in the economic life of the country. Apart from providingone of the basic necessities of life, the textile industry also plays a pivotalrole through its contribution to industrial output, employment generation andthe export earnings of the country. This article first reviews the static scenario of the Indiantextile sector and its standing in the world textile economy. It then discusses and analyses the trend inproduction and export of Indian textile and clothing. Finally, it looks atsupportive government policies for facilitating growth in this sector, theindustrys response to those policies and emerging trends that are making thesector strong and vibrant. This article concludes with a discussion on whatwould make the Indian textile and clothing industry more competitive globally.

Keywords: Indian textile industry, Investment in textile sector,Textile growth, Textile & clothing exports, Global recession

Introduction

The Indian Textile Industry has anoverwhelming presence in the economic life of the country. Apart from providingone of the basic necessities of life, the textile industry also plays a pivotalrole through its contribution to industrial output, employment generation andthe export earnings of the country. Currently, it contributes about 14%age toindustrial production, 4%age to the GDP and 17%age to the country's exportearnings. It provides direct employment to over 35 million people, whichincludes a substantial number of SC/ST, and women. The textile sector is thesecond largest provider of employment after agriculture. Thus, the growth andall round development of this industry has a direct bearing on the improvementof the economy of the nation.

The Indian textile and clothing industry, asone of the oldest industries of the country, has witnessed several changes infortune during the post-independence period. Following a quick upturn in theimmediate post-independence period until the 1960s, when the dominant industrialpolicy was that of import substitution, it went into a decline until almost1985 as market forces were not being allowed to operate and the entire policyhad become very restrictive and stifling. The "New Textile Policy" of1985 managed to relax several licensing requirements, raised the maximuminvestment limit and generally created a good investment climate. However, inthe absence of a general economic resurgence in the country, the textile sectorcontinued to languish until a few years ago. Since then, it has witnessedunprecedented optimism and investment, heralding the vision of a new andglorious era in the Indian textile and clothing sector.

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About the Authors

B. R.Das is associatedwith the Department of Textile Technology, Indian Institute of Technology, New Delhi, India and S. Hati is with Utkal University of Culture, Bhubaneswar, Orissa, India.