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Cotton Industry in India

Cotton Industry in India


  • Textile industry includes cotton, jute, wool, silk, and synthetic fibre textiles.
  • India is one of the leading producers of textile goods.
  • Cotton plays an important role in the Indian economy as the country’s textile industry is predominantly cotton based.
  • India is one of the largest producers as well as exporters of cotton yarn.
  • The textile industry is also expected to reach US$ 223 billion by the year 2021.
  • The states of Gujarat, Maharashtra, Telangana, Andhra Pradesh, Karnataka, Madhya Pradesh, Haryana, Rajasthan, and Punjab are the major cotton producers in India.
  • There has been a phenomenal growth in this industry during the last four decades.
  • About 16 per cent of the industrial capital and over 20 per cent of the industrial labour of the country is engaged in this industry.


  • India enjoyed monopoly in the production of textile goods from 1500 BC to 1500 AD.
  • Indian cotton and silk textiles were in great demand all over the world.
  • It was the arrival of the British in India and the Industrial Revolution in Britain in 1779 which led to the downfall of the Indian manufacturing.
  • Before the British rule, Indian handspun and handwoven cloth already had a wide market. The Muslins of Dhaka, Chintzes of Masulipatnam, Calicos of Calicut and Gold-wrought cotton of Burhanpur, Surat and Vadodara were known worldwide for their quality and design. But the production of handwoven cotton textile was expensive and time-consuming. Hence, the traditional cotton textile industry could not face the competition from the new textile mills of the West, which produced cheap and good quality fabrics through mechanized industrial units.
  • A host of factors such as low labour costs, government subsidies, irrigation, proximity to ports led to the spread of the cotton textile industry.

First Cotton Mill of India

  • Bowreah Cotton Mills was India’s first cotton cloth mill, established in 1818 by British at Fort Gloster, located 15 miles south of Calcutta. However, this mill was a failure.
  • The true foundation of India’s modern cotton cloth industry was established when KGN Daber established Bombay Spinning and weaving Company in 1854.
  • The first cotton mill of Ahmadabad was established in 1861.
  • In due course of time, Mumbai and Ahmadabad emerged as two rival centres of cotton textiles in India.

Impact of Partition on Cotton Industry

  • Partition of India in 1947 affected Indian cotton industry badly.
  • Out of 423 textile mills of the undivided India, India received 409 after partition and the remaining 14 went to Pakistan.
  • However, most of the weavers (who were Muslims) migrated to Pakistan.
  • Further, a large part of cotton producing area also went to Pakistan. Due to this, India was forced to import raw cotton to keep the mills alive.
  • The industry also tended to shift from areas of high labour cost to those with low labour cost. The labour cost factor played a crucial role in establishing this industry at Madurai, Tirunelveli, and Coimbatore.
  • Government Incentives: Handloom industry considered highly labour-intensive, beneficial to the village economy and women empowerment. Therefore the government aids them with measures such as the Integrated Village Handloom Development scheme and National Silk Yarn Scheme.
  • Handloom sector employs more than 65 lakh people and contributes to 15 % of total textile productions. They are widely distributed throughout the country, states of Tamil Nadu, Uttar Pradesh, Assam and Manipur account for nearly 50 per cent of the production capacity.

Geographical distribution

  • The Cotton Textile centres in India are distributed in four regions: Western Region, Southern Region, Northern Region and Eastern Region.
  • The states like Maharashtra, Gujarat, Tamil Nadu, Uttar Pradesh, Karnataka, Madhya Pradesh, Rajasthan and West Bengal have very high degree of concentration of this industry and especially in the three cities of Bombay, Ahmedabad and Coimbatore.
  • Maharashtra
    • It is the leading producer of cotton textile in India.  Mumbai is called as ‘Cottonpolis of India’. The textile industry has also spread to Sholapur, Kolhapur, Pune, Jalgaon, Akola, Sangali, Nagpur, Satara, Wardha, Aurangabad and Amravati.
  • Gujarat
    • It is the second largest producer of cotton textiles after Maharashtra. Ahmedabad is called ‘Manchester of India & Boston of East’ and it is also second largest centre of cotton textile industry after Mumbai. The other important centres are- Surat, Vadodara, Bharauch, Bhavnagar, Nadiad, Porbandar, Rajkot, Navsari, mauri and Viramgam.
  • Tamil Nadu
    • Chennai, Tirunelveli, Madurai, Tuticorin, Salem, Virudhnagar and Polachi are the major cotton textile centres. Coimbatore is called ‘Manchester of South India’ because it is the most important cotton textile centre.
  • Uttar Pradesh
    • Kanpur, Etawah, Modinagar, Moradabad, Bareilly, Hathras, Agra, Meerut and Varanasi are the major cotton textile producing centres in the state. Kanpur is called ‘Manchester of Uttar Pradesh’.
  • Karnataka
    • Bangalore, Belgaum, Mangalore, Chitradurga, Galbarga and Mysore are the major cotton textile producing centres in the state.
  • Madhya Pradesh
    • Indore, Gwalior, Mandasaur, Dewas, Ujjain, Nagda, Bhopal, Jabalpur and Ratlam are the major cotton textile producing centres in the state.
  • Rajasthan
    • Kota, Jaipur, Sriganganagar, Bhilwara, Bhavanimandi, Udaipur and Kishangunj are the major cotton textile producing centres in the state.
  • West Bengal
    • The major cotton textile producing centres in the state are Kolkata, Howrah, Serampore, Shyamanagar, Saikia, Murshidabad, Hugli and Panihar.

Cotton Exports  | Cotton Industry in India

  • India is a major exporter of cotton textiles.
  • Cotton yarn, cloth and readymade garments form important items of Indian exports.
  • Indian garments are well known throughout the world for their quality and design and are readily accepted in the world of fashion.
  • The Expert Committee on Textile Policy set up in 1998 submitted its report to the Government in August 1999.
  • One of the important targets outlined in the Textile Policy 2000 was to push textile and apparel exports from $ 11 billion to $ 50 billion by 2010 with the share of garments at $ 25 billion.
  • The main destinations of our exports are the USA, Russia, U.K., France, East European countries, Australia, New Zealand, Nepal, Singapore, Sri Lanka and some African countries.

Problems of Cotton Textile Industry

  • 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.
  • 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.
  • Erratic Power Supply:
    • Power supply to most cotton textile mills is erratic and inadequate which adversely affects the production.
  • 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.
  • Stiff Competition:
    • Indian cotton mill industry has to face stiff competition from powerloom and handloom sector, synthetic fibres and from products of other countries.
  • Strikes:
    • 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.
  • 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.

Government Policy in Textile Industry

  • Technology Upgradation Fund Scheme (TUFS)
    • The government had launched a Technology Upgradation Fund Scheme in 1999 to provide easy access to capital for technological upgradation in the textile sector. It is an “interest subsidy” scheme that provides for reimbursement of 5% out of interest actually charged by the lending agencies for facilitating investment in modernization of Textiles Jute Industries. The scheme is being operated through nodal agencies (IDBI,SIDBI,IFCI and major nationalized banks). Current Government is planning to restructure this scheme, making it industry friendly.
  • Technology Mission on Cotton
    • Technology Mission on Cotton (TMC) was launched in 2000 with four mini-missions in its ambit viz. Cotton Research & Technology Generation; Transfer of Technology & Development; Development of Market Infrastructure and Modernization / Setting up of new G&P (ginning & pressing) factories to give a total makeover to the cotton industry.
  • National Textile Policy
    • Government of India had earlier launched a National Textile Policy in 1985 and then 2000 to increase textile and apparel exports and pay focussed attention to the textile sector including cotton, silk, jute and woollen textiles. Currently, the NDA government is in the process of finalizing new Textile Policy which would aim to achieve USD 300 billion textiles exports by 2024-25 and creation of additional 35 million jobs. In this context, the Ajay Shankar Committee was established to review the 2000 policy and suggest framework for new NTP.
  • Scheme for Integrated Textile Parks
    • This policy provides world class infrastructure to new textile units. As of now, some 57 Textile Parks have been sanctioned. By 2017, 25 more Textile Parks are to be sanctioned.
    • Further, the Budget 2014-15 also provided for Rs. 200 crore to set up mega textile clusters at Bareilly, Lucknow, Surat, Kuttch, Bhagalpur and Mysore and one in Tamil Nadu.

Current status | Cotton Industry in India

  • At present, cotton textile industry is largest organised modem industry of India.
  • There has been a phenomenal growth of this industry during the last four decades.
  • About 16 per cent of the industrial capital and over 20 per cent of the industrial labour of the country is engaged in this industry.
  • The total employment in this industry is well over 15 million workers.
  • There are at present 1,719 textile mills in the country, out of which 188 mills are in public sector, 147 in cooperative sector and 1,384 in private sector.
  • About three-fourths were spinning mills and the remaining one-fourth composite mills.
  • Apart from the mill sector, there are several thousand small factories comprising 5 to 10 looms.



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