Textile output is among one of India’s flagship industries with a production range spanning man-made fibre, silk, wool, jute and cotton, both as cloth, yarn or other related products. As of the year ended March 2014, India produced 63.4 billion square metres of cloth along with other types weighing 5.31 million kilograms. India also distinguishes itself as the second largest textile exporter globally behind China, ahead of Germany and Italy based on data from India’s Apparel Export Promotion Council. In view of the increasing importance of the textile sector to India’s economy, the CEIC India Database has been enhanced with additional textile datasets, including installed capacities, trade statistics and auxiliary information pertaining to the sector, including closures of mills, electricity consumption and credit channelled to the sector, among other important variables. The textile sector occupies a major position in India’s manufacturing base, employing approximately 10.8% of total manufacturing sector employees and comprising 8.3% of total factories as of the fiscal year ended March 2013, based on the Annual Survey of Industry. The survey further estimates a net value added (output less input and depreciation) of INR462.5 billion during 2013. In terms of its contribution to India’s external position, textile exports constituted 10.1% of total exports as of the year ended March 2013 and were worth USD31.48 billion, rising consistently since 2011 from USD19.85 billion in the 2010 fiscal year.

As of March 2014, India’s textile industry contained approximately 1,954 mills (excluding small scale and cottage industries). These mills are largely concentrated in Tamil Nadu (which hosts nearly half of all India’s textile mills), although other major textile production centres can be found in Maharashtra and Andhra Pradesh. The bulk of India’s textile mills are also privately owned enterprises (approximately 86.54% of total mills) –constituting the main producers of both cotton and non-cotton with an overall production share of 96.01%. India’s strong production capacity is further supported by high installed capacity in these mills, hence allowing room for future potential expansions. As of November 2014, the textile industry was equipped with 44.75 million units of spindles, 560,996 units of rotors and 1,184 units of knitting machines.

Prices of textile, however, have been receding during the latter portion of 2014, largely due to excess supply of cotton. This, in part, is attributable to rising cotton cultivation globally –including India – which has seen inventories (stocks) accumulate. Despite the potentially adverse impact on India’s cotton cultivation, the downsides are balanced by strong overall output owing to improved agricultural yields and robust output due to favourable weather conditions. Indeed, lower prices are expected to reduce costs and hence improve the operating margins of India’s domestic manufacturers. This is further supported by progressive state policies targeted at modernising the textile sector alongside the reduction in industry taxes.