Structure and Composition of India’s Textile and Apparel Industry: A Descriptive Analysis of Production, Employment, and Exports

Introduction

The textiles and apparel industry is strategic to the Indian industrial and socio-economic structure. The importance of the textiles and apparel industry can be conceived not only in terms of its historical background but also in terms of its broad production base and performance role in employment generation and export performance. Unlike most other manufacturing segments, the textiles and apparel industry in India covers the entire gamut from natural fibre production to value-added segments such as apparel, home textiles, and, more recently, technical textiles. This "fibre-to- fashion" supply chain advantage for India is truly unique among textile-producing nations, and it continues to be instrumental in shaping future strategic alignments in national industrial development. Estimates suggest that it contributes about 2 per cent to the country’s Gross Domestic Product (GDP) and about 11 per cent to the manufacturing GVA, which is indicative of its strategic significance as one of the key drivers of industrial production and inclusive growth (Ministry of Textiles, 2024). Employment intensity, which is quite exceptional and extensive on the social and economic front, is one of the most striking features of the textiles and apparel industry in India.

The sector is considered the second most significant employment generator after agriculture and is linked to livelihoods in rural, semi-urban, and urban areas. According to Government estimates, over 45 million are directly in textiles and apparel, and more than 100 million are indirectly in cotton cultivation, handloom weaving, handicrafts, ginning, transport, trade, etc. Press Information Bureau [PIB] (2025a). Therefore, the industry offers immediate opportunities for women’s participation and regionally dispersed development. From a trade perspective, textiles and apparel remain an important constituent of India’s merchandise export basket, despite growing global competition and volatile demand conditions. Recent government disclosures reveal that textile and apparel exports from India were around USD 37.7-38 billion during 2024-25. This contributes nearly 8 per cent to total goods exports (PIB, 2025b). The USA and the European Union remain major export markets. The USA and the EU together are major contributors to export revenue. Though cotton goods and ready-made garments still account for a major share of exports, the increase in home textiles, carpets, handicrafts, and certain MMF goods trends toward a positive deviation in the export basket. Structurally, the Indian textile and apparel sector is highly diverse. This sector comprises a large number of production units that differ significantly in their production systems, scales, and technology use across various stages of the value chain. The upstream part of this chain comprises fibre production, which entails both natural fibres like cotton, jute, silk, and wool, as well as man-made fibres. This is followed by spinning, weaving/knitting, processing, and downstream garment and made-ups production. This sector comprises large, organised mills and export-oriented garment processing units, as well as traditional handloom, power loom, and home-based production units. This has led to dualism in the industry structure, affecting productivity and value addition in this sector (Ministry of Textiles, 2024). The industry is also known to have high regional concentrations, and specialised textile groups have emerged in various states, such as Tamil Nadu, Gujarat, Maharashtra, Punjab, West Bengal, and Uttar Pradesh. These geographical concentrations display functional specialisation, such as spinning and knitwear groups, export groups, handloom groups, and processing groups, thereby defining the geographical structure of the textiles industry in India. On the other hand, geographical concentrations limit the supply chains, labour forces, and industrial systems of various regions, influencing the distribution of economic benefits in those areas. In recent years, policy interventions have become increasingly key determinants of the structural evolution trajectory of the textile and apparel industry. Initiatives such as PM-MITRA Parks for Mega Integrated Textile Regions and Apparel, the PLI Scheme for Textiles, and specific skill- development programs all reflect a conscious policy thrust toward integrated manufacturing, improved infrastructure, and encouragement of man-made fibres and technical textiles. This will help overcome some of the persistent structural problems of fragmentation and inadequate scale economies caused by infrastructure bottlenecks. The schemes will also consolidate the industry's response to the changing demand pattern in the global market. However, the industry is still plagued by structural problems generated by international competitiveness pressures, the presence of tariff and non-tariff barriers to trade in key export destinations, the growing burden of compliance costs, and demand uncertainty in the global marketplace. With growing pressures of competitiveness in the international textile market, supply-chain disruptions, and cost factors, the Indian textile sector is starting to be influenced in its production pattern or export decisions. Against this background, the need to arrive at a comprehensive understanding of the existing textile structure becomes significant.

In this regard, this study makes a descriptive sectoral analysis of the structure and composition of the textile and apparel sector in India. Based on available secondary data published in official publications, this paper aims to provide a descriptive overview of the structure of the value chains, composition, geographical distribution, and recent trends in the textile and apparel sector in India. The purpose of this sectoral descriptive mapping is to provide a basis for further research to analyse the dynamics of this sector in India.

Review of literature

Structural Organisation of India’s Textile and Apparel Industry

The structural arrangement of the Indian textile and clothing industry has been extensively researched in the literature, largely driven by the industry's peculiar integration of agri- and manufacturing processes. Tewari (2006) is a landmark work on the evolution of the industry that highlights the ‘fibre to fashion’ value chain encompassing material production, spinning, weaving, processing, and clothing manufacturing. Such an integrated approach has been recognised as an important distinguishing factor of the Indian textile industry, enabling diversity in scale and manufacturing flexibility. In further defining the structural nature of this sector, Devaraja (2011) explains that “the concomitants of both traditional and modern production systems have moulded the total structure of the industry.” Local culinary tradition and modern global distribution networks have resulted in a fragmented sector that lacks consistency in terms of technology and modernisation.

Organised and Unorganised Segments

One of the major concerns in the existing body of knowledge is the dual nature of the textile industry in India, marked by the coexistence of the organised and unorganised sectors. Kar (2012) highlights that large spinning mills and export-oriented garment units constitute the organised sector, while weaving and processing activities are mainly carried out in the unorganised sector.It is evident from the studies that despite the organised sector making a disproportionately large contribution to the addition of value and exports, the unorganised sector continues to remain the

focal point for employment generation as well as dispersal of industries (Devaraja, 2011). Instead, this division continues to be part of the textile industry across all indices.

Fibre Composition and Product Diversification

The fibre-wise structure of the Indian textile industry is an equally prominent field of academic research. The literature to date highlights the dominance of the cotton sector in the Indian textiles industry. This trend has been largely driven by the agricultural structure of the Indian economy (Devaraja, 2011). Cotton-based products have traditionally dominated production and Export. Recent literature focuses on a trend of diversification into man-made fibres. This is influenced by changes in consumption trends and competition in the global market (Gautam & Lal, 2018; Kim, 2019). The literature states that export diversification into MMF fibres is needed if the country is to maintain exports, as cotton remains strategically important in domestic production.

Regional Clustering and Spatial Distribution

The spatial distribution of textile production in India viewed through the industrial clustering perspective: Tewari (2006) and Kanupriya (2020) have traced the growth of specialised textile clusters in various states, including Tamil Nadu, Gujarat, Maharashtra, West Bengal, and Uttar Pradesh. Such clusters correspond to a particular segment of the value chain and possess shared infrastructure, skilled labour, and established supply-chain linkages. The literature would support the claim that cluster-based organisation leads to economies of agglomeration and export competitiveness. However, regional disparities in infrastructure quality, technology adoption levels, and market access continue to influence uneven development across clusters.

Export Performance and Employment Significance

The current literature also highlights the significance of the textile and clothing sector in India's overall export structure and employment. According to the opinions of Gautam & Lal (2018); Kim (2019), the overall performance of India has remained stable for several years now in the international markets of textiles and clothing exports, though the export performance sometimes remains unbalanced across the types of products. Regarding employment, the industry has been identified as one of the largest employers in the Indian manufacturing sector. This has been emphasised by Kar (2012) regarding the labour-intensive nature of textiles and clothing production, especially in the handloom and powerloom segments. The importance of this industry in employment and export has been emphasised by recent government estimates (Ministry of Textiles, 2024; Press Information Bureau, 2025)

Research Gap

Despite a substantial body of literature on individual aspects of the textile and apparel industry, existing studies largely focus on specific dimensions such as productivity, exports, fibre composition, or regional clusters in isolation. Comprehensive and updated descriptive analyses that integrate structural organisation, organised–unorganised dualism, fibre composition, regional clustering, and recent export trends remain limited. This gap underscores the need for a consolidated sectoral analysis based on recent official data, which the present study seeks to address.

Research Objectives

The present study is undertaken with the following objectives:

To examine the structural organisation of India’s textile and apparel industry by mapping its major value-chain segments from fibre production to finished apparel and made-ups.

To analyse the compositional characteristics of the industry in terms of fibre types, organised and unorganised segments, and the regional distribution of production activities.

To present recent trends in production, employment, and exports of the Indian textile and apparel industry using secondary data.

Research methodology

Research Design

The present study adopts a descriptive research design, which is appropriate for examining the structure and composition of an industry without establishing causal relationships. Descriptive research systematically presents sectoral characteristics, patterns, and trends based on existing information and is widely used in commerce and policy-oriented studies.

Nature and Sources of Data

Data collection in this study is based solely on secondary data from authentic and reliable sources. The main sources of data for this purpose are official publications from the Ministry of Textiles, Government of India, press releases from the PIB, and statistical reports published by government agencies such as MOSPI. Additionally, reputable national newspapers, including The Times of India, have been used to capture recent developments and contextual information on the textile and apparel industry.

Period of Study

The period of study spans from 2010–11 to 2024–25, enabling the analysis to capture recent structural changes and compositional trends in India’s textile and apparel industry, including developments in the post-pandemic period. The selection of this time frame is guided by data availability and the need to reflect contemporary sectoral dynamics.

Analytical Tools and Techniques

In line with the descriptive nature of the study, simple analytical tools such as percentage analysis and trend analysis are employed. Data are presented in tables and graphical representations to facilitate a clear understanding of the industry’s value chain, fibre-wise composition, organised and unorganised segments, regional distribution, and trends in production, employment, and exports. No econometric or inferential techniques are applied.

Scope and Limitations of the Study

The scope of the study is confined to a sectoral-level descriptive analysis of India’s textile and apparel industry. The analysis focuses on mapping the industry’s structural organisation and compositional characteristics, while firm-level behaviour and causal assessment of policy impacts are outside the scope of the present study. As the study relies solely on secondary data, the findings may be subject to limitations arising from revisions to official data and reporting constraints.

Structure and composition of india’s textile and apparel industry

Value Chain Structure of the Textile and Apparel Industry

The textile and garment sector in India is a multi-stage, integrated value chain that ranges from fibre production to garment and made-up product production. The principal stages of the textile sector's value chain are the production of natural and man-made fibres, spinning, weaving or knitting, processing (including dyeing, printing, and finishing), garmenting, and distribution. The ‘fibre-to-fashion’ value chain pattern makes the country distinct from many other textile-exporting countries (Ministry of Textiles, 2024; India Brand Equity Foundation [IBEF], 2025).

The upstream part of the value chain is closely linked to the agriculture sector, especially for cotton, jute, and silk, whereas the midstream and downstream parts of the value chain are linked to the manufacturing sector, both traditional and modern. This is because there are domestic units, MSMEs, and large mills, which indicate the fragmented and interwoven nature of the sector (Press Information Bureau (PIB), 2025a).

An overview of the textile and apparel value chain is presented in Table 4.1

Table 4.1: Structure of the Textile and Apparel Value Chain in India

Fibre-wise Composition of the Industry

The structure of the Indian textiles and apparel industry is driven by the presence of diverse fibres, including cotton, man-made fibres (MMF), silk, wool, and jute. The prominence of cotton has remained unchanged because of India’s rich farming traditions and historical competency in cotton textiles. Cotton-based yarns, fabrics, and apparel remain an important part of Indian production and export statistics (Ministry of Textiles, 2024).

In recent years, the contribution of Man-made Fibres has been gradually rising, incorporating the global demand trends and government focus on MMF and Technical textiles (PIB, 2025b). Silk and wool remain speciality segments focused on value-added and traditional products, while jute maintains its regional importance, especially in eastern India. The sector-wise break-up of fibres is presented in Table 4.2.

Table 4.2: Fibre-wise Composition of India’s Textile Industry

Organised and Unorganised Segments

A defining structural characteristic of the Indian textile and apparel industry is its organised-unorganised configuration. The organised segment comprises spinning mills, composite mills, and export-oriented garment-manufacturing units that operate at relatively higher levels of capital intensity, modern technology, and formal compliance. This segment accounts for a considerable share of exports and organised employment, especially in the apparel and made-ups category (Ministry of Textiles, 2024; MOSPI, 2023).

This is in contrast to the unorganised segment, which represents handlooms, power looms, small processing units, and household-based enterprises. It accounts for a sizeable share in both fabric production and employment, particularly in weaving and finishing. Although lower productivity levels may be expected in this sector, the unorganised sector still contributes considerably to employment generation and regional industrial development.

A comparative overview of the two segments is provided in Table 4.3.

Table 4.3: Organised and Unorganised Segments of the Textile Industry

Role of Handloom and Power Loom Sectors

Handlooms and power looms are a crucial part of the Indian fabric manufacturing value chain. Handloom is linked to skills passed down through generations, the handmade production of fabric, and fabric distinctive to that particular culture. This industry is quite decentralised and spreads over a few states (Ministry of Textiles, 2024). The power loom industry is a semi-mechanised sector that is positioned between the traditional handloom sector and the modern mill sector. The use of power looms is quite common in weaving cotton, synthetic, and blended fabrics, and the sector collectively contributes a large portion of fabric to the country. The power loom sector is found in dedicated clusters that support mass production and supply fabric to the domestic and garment sectors (PIB, 2025b).

The role of these two sectors is summarised in Table 4.4.

Table 4.4: Role of Handloom and Power Loom Sectors

Regional Distribution and Textile Clusters

The Indian textile and garment industry shows considerable regionalisation and the development of specialised clusters across different states. Tamil Nadu and Gujarat are major destinations for spinning, weaving, and garmenting, and Maharashtra is a major hub of power loom and processing units. West Bengal is a major player in jute textile production, and states like Uttar Pradesh and Bihar are well known for handloom and handicraft products (IBEF, 2025). All the above-mentioned geographical locations benefit from advantages of agglomeration and enjoy shared infrastructure, availability of expert labor, and developed supply chain networks. However, regional differences in infrastructure and technology development shape the production processes across different states.

Major textile clusters and their specialisations are presented in Table 4.5.

Table 4.5: Major Textile and Apparel Clusters in India

Summary of Structural and Compositional Features

Overall, India’s textile and apparel industry is marked by a complex structural arrangement and diverse compositional characteristics. The presence of a complete value chain, a multi-fibre base, dual organised–unorganised segments, regionally specialised clusters, and a strong handloom and power loom presence collectively define the sector’s structure. This descriptive assessment provides a reliable baseline for understanding the industry's organisation and for guiding future analytical and empirical research.

Results and discussion

The key results from the study are reported and discussed in this section by associating the structural and compositional properties of India’s textile and apparel industry, as obtained in Section 4, with recent performance patterns. The conversation is interpretive and intends to clarify how industry composition and structure influence production, employment, and trade outcomes.

Implications of the Value Chain Structure

The findings also suggest that the presence of a fibre-to-fashion value chain adds greater depth and flexibility to the Indian textile and apparel industry. As is explained in Section 4, the interlinkage of fibre production, spinning, fabric production & weaving (or knitting), cloth processing and garment production in an economy provides a range for industry to operate having multi-node functionality across its value chain. This enables the sector to cater to both home and export markets. Conversely, the dispersed nature of the value chain, in that it coexists with household units, small mills, and integrated mills, influences efficiency. Though the organisation accelerates job generation, the different blocks show variations in productivity and technological utilisation.

The findings also show that the presence of a fibre-to-fashion value chain adds significant depth and flexibility to the Indian textile apparel industry. As already described in Section 4, the networking of fibre production, spinning, fabric production, cloth processing, and garment production in the economy creates the scope for an industry that maintains multi-node functionality in its value chain. This enables the industry to serve both the home market and export markets. On the other hand, the fragmented structure of the value chain, in the sense that the industry co-exists with household units, small firms, and integrated mills, affects efficiency. Even though the structure promotes job creation to a greater extent, the different segments experience disparities in productivity and technological use.

Performance Implications of Fibre Composition

The implications of the fibre-wise structure of the industry are quite significant in understanding the overall performance trend in recent years. The dominance in the production of cotton-based textiles is proof in itself of the industry’s close linkages with agriculture and its competency in cotton yarns, fabrics, and clothing. Nevertheless, the evidence of a gradual increase in the production of man-made fibre-based products, discussed in Section 4, indicates a shift in this composition due to changes in global demand patterns. Such diversification has contributed to increased demand in downstream segments such as clothing and made-ups, reducing dependence on textiles. This suggests that there is a transformation due to a shift, but it is adaptive.

Organised and Unorganised Segments and Employment Outcomes

This dual structure persists, with its theoretical and empirical manifestations evident in outcomes related to employment and production in the post-reform period of the textile and apparel industry. The organised units, particularly the spinning units and export-oriented garments units, markedly contribute to value addition and export earnings. The unorganised sector remains dominant in terms of its contribution to fabric production and employment, especially in handloom and power loom activities. This coexistence reinforces the industry’s labour-intensive character and identifies it as a major source of employment in rural and semi-urban areas. At the same time, however, these two segments are characterised by significant differences in scale, technology, and compliance parameters, which continue to make productivity levels highly uneven in the sector. The persistence of this dualism underlines that structural transformation within the industry is a gradual process rather than a shock.

Regional Clusters and Production Patterns

As sketched in Section 4, the regional constitution of textile activities is a determining factor in production and performance outcomes. Specialised textile clusters benefit from shared infrastructure, skilled labour, and established supply-chain linkages, which contribute to agglomeration economies. These clusters, in turn, support both large-scale production and specialised manufacturing, depending on regional strengths. However, regional disparities in infrastructure quality, access to technology, and investment levels condition productivity and growth across the clusters. Hence, the performance outcomes vary across regions, reflecting differences in industrial capabilities and market orientation.

Trends in Exports and Sectoral Resilience

Recent trends indicate that India’s textile and apparel industry has demonstrated relative resilience despite global economic uncertainty. Export performance shows recovery and stability, supported by growth in garments, man-made fibre products, jute goods, and handicrafts. These segments reflect the increasing importance of value-added and downstream activities in India’s export basket.

The results suggest that diversification across product categories and markets has helped mitigate external shocks and maintain export momentum. At the same time, traditional textile segments continue to play a stabilising role, reinforcing the industry’s balanced export structure.

Integrated Interpretation

Overall, the findings suggest that the structure and composition of India’s textile and apparel industry are closely linked to its recent performance trends. The presence of an integrated value chain, a diversified fibre base, regionally specialised clusters, and a dual organised–unorganised structure has enabled the industry to adapt to changing economic and market conditions. While these characteristics support resilience and employment generation, they also highlight persistent structural constraints related to productivity and regional disparities. This integrated results and discussion section provides a comprehensive descriptive understanding of the contemporary organisation and performance of the Indian textile and apparel industry.

Conclusion and future scope

The current study presents a descriptive, holistic perspective on the makeup and composition of the textile and apparel industry in India. The current analysis has tended to emphasise that the textile and apparel industry has been marked by an integrated fibre-to-fashion supply chain, diverse fibre resources, and the coexistence of the organised and unorganised sectors. The results show that although the organised segments, especially spinning mills and export-oriented garmenting units, are major contributors to value addition and exports, the unorganised sector remains integrally linked to cloth production and employment. This is because handloom and power loom activities continue to be sustenance activities at the rural and semi-urban levels, as the industry remains inherently labour-intensive. Nevertheless, the geographical concentration of textile industry activities has contributed to the development of specialised regional clusters. Originally, the industry has remained composed with gradual transformation over time. Cotton-based textiles remain the primary source at the production and export levels because India remains agriculturally linked and has developed relevant competencies. Nevertheless, with an increase in the number of man-made fibres and value-added segments, including garmenting, home textiles, and technical textiles, there has been a slow transformation due to international demand pressures. As far as the overall impact of this study is concerned, it can be safely stated that the structural characteristics of the textile and apparel industry are closely linked to the recent outcomes. The recent relative resiliency, despite the prevailing structural limitations, could be attributed to the integrated value chain and industry diversification. Therefore, this paper will help in understanding the recent organisation of the textile and apparel industry in the country, based on a descriptive benchmark derived from recent official statistics.

Regarding future scope, the descriptive findings of this study have identified multiple research areas that warrant further investigation. Such areas of study may include analysing differences in firm productivity between the organised and unorganised sectors, the effects of new policies on regional and employment quality, and, lastly, the competitiveness of certain products in the international market. These areas will help complement the findings of the current study and provide a clearer understanding of the dynamic changes occurring within the Indian textiles and clothing industry.

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