Indian Textile Industry: An Overview 
India is among top 10 economies of the world with a GDP of $ 2.4 trillion USD. The current growth rate in the index suggests that the outlook for the Indian economy is going to be buoyant in the times ahead, so will be the TEXTILE INDUSTRY which accounts for 20% of its industrial production employing 15 million people. 30% of India's export basket consists of textiles and garments, making it the largest contributors.
Indian Textile Industry is the second largest in the world.  It has the largest cotton acreage of 9 million hectares and is the third largest producer of this fiber. It ranks fourth in terms of staple fiber production and sixth among filament yarn production. The country accounts for about one fourth of global trade in cotton yarn besides having high level of operational efficiencies in spinning and weaving: around 96% for spinning and 85-90% for weaving.  

Considering the natural competitive advantage that India has in terms of a strong and large multi-fibre base, abundant cheap skilled labour and presence across entire value chain, from spinning weaving and made-ups to manufacture of garments, foreign retailers like Wal Mart, Levis, Gap, J C Penny, Marks & Spencer and NEXT have increased their sourcing from India in a big way.
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Global trade in textiles and apparel is expected to increase US$ 600 billion by 2010. India expects to increase its current share of 3% in apparel exports to 5% in 2008. Envisaging an annual growth target of 11-12 %, the industry is on its way to achieve the target of USD 85 billion in 2010. 

Anticipating an increase in demand, a number of textile firms installed new capacities to the tune of 6.2 million units.  India’s production of synthetic yarn and fabric are also showing a healthy rise and has grown at 75% and 60% respectively in last two years. Among fibres, although cotton has the largest share (around 58% of mill consumption), Indian industry has over the years steadily diversified its raw material base to include man-made fibres such as polyester, viscose, acrylic, polypropylene etc. (accounting for around 39% of raw material consumed), as well as other natural fibres (including silk, wool, linen etc.). In fact, Indian companies have built global scale even in non-traditional areas (such as Reliance Industries in polyester, and the Aditya Birla group, which is the world's largest producer of viscose fibre).

India is being seen by more and more customers as a hub, rather than a stand-alone sourcing opportunity. Standing alone, India exports about US$ 13 billion of textile and apparel products, and this figure is slated to grow to over US$ 20 billion by 2006.

However, even more interesting is India's position as a regional hub, including sourcing from Bangladesh, Sri Lanka and Nepal. In apparel alone, India, Bangladesh and Sri Lanka already export around US$ 12 billion to global markets, and are growing further.
Certainly, India's size as a potential market is an important factor in its role as a hub, and many of the companies are looking to grow their sourcing base in and around India as a precursor to selling within the Indian market.

India has averaged an annual growth rate of GDP over 6% over the last several years, and this is improving the overall prosperity of the population. The consumer market was already relatively well-developed which is improving further with favourable factors such as rationalisation of taxes, reduced import tariffs, and a growing young segment that is willing to spend more. International brands already present in the market include Benetton, Lacoste, Levi Strauss, Crocodile, Dockers, Lee, Wrangler, Nike, Reebok, Adidas, Zegna, Marks & Spencer etc. There is also a boom in retail development: organised retailing projected to grow from a 0.8% share to 5% by 2005, of a $170 billion market (in absolute terms) [a $935 billion market, in PPP terms].

Now with recent announcements made in the budget, like extension and enhancement of Technology Upgradation Fund Scheme (TUFS), allocation of funds for Integrated Apparel Park Scheme, reduction of excise duty on all man-made fibre yarn and filament yarn from 16% to 8%, import duty on all man-made fibres and yarns from 15% to 10%; import duty on raw material such as DMT, PTA and MEG from 15% to 10% and many more, Indian textile industry will be major beneficiary.