Indian Textile Industry and role of the Government in promotion of this industry in International Market

100 shares, 114 points
Indian Textile industry

In India after the Agricultural Industry, Textile Industry is the 2nd largest employment generation sector, it is considered as oldest industries in Indian economy. Textile industries are based on the agricultural products for the raw materials which can be used in production of final goods. Revolution in clothing sector started before the revolution of other industries as cloth is one of the three basic needs of human being. Cotton is the main raw materials used in production of textile goods, India is exporting fine cotton fabrics to all the countries in the world and Government provides incentive to promote the exports and allow duty free import of raw materials and the capital goods. Under EPCG Scheme license is issued to allow duty free import of capital goods to manufacture the textile goods to make the products cost competitive in international market and to match the international standard. This Industry is classified into two following categories –

  1. The organized mill sector
  2. Unorganized decentralized sector

Also Read: Rajasthani Handicrafts – The True Indian Heritage Art!

The Indian textile industry has following contribution:-

  • Textile industry contributes 2.3% of GDP
  • 7% of Manufacturing Production
  • 13% in exports
  • Providing the employment to 50 million People

In India, Textile Industry has the following category to manufacture the textile products.

Textile Industry Segments

Strengths and Weaknesses of textile Industry:-


  • India has wide range of production units in textile sector
  • Skilled workers are available at cheap rate
  • It has enough raw materials for the production of final products
  • Great entrepreneurial skill required for the textile sector
  • In India Textile sector is very less dependent on any other country for the import as it has enough fibres in the country


  • Textile industry is mostly unorganized
  • Outdated technology used in manufacturing
  • Production Cost is more as compare to other countries
  • Textile products are not very competitive in Global market

Also Read: Can India Overtake China as the New Global Manufacturing Hub?

Government Schemes for the Textile Industry:-

Incentive on the Exports:-

To promote the exports of textile products, Government launched various schemes for the purpose of giving incentives on the eligible exports in the form of duty credit scrip which can be used in waiver of customs duty.

Under MEIS Scheme textile exporters were getting 4% incentive on the FOB value of exports, but the government has discontinued MEIS benefits for the textile sector in response to the International pressure to discontinue MEIS benefits as it is not compliant with WTO norms. Government has introduced RoSCTL Scheme to provide the incentive on the readymade garments and made-ups, RoSCTL stands for the Rebate of State and Central Taxes and Levies (RoSCTL) scheme.

Import License to save customs duty:-

The Government has introduced various import authorisations to save the customs duty, under Advance Authorisation Scheme raw materials can be imported at zero customs duty to manufacture the export goods.


Like it? Share with your friends!

100 shares, 114 points
Nirmalya Ghosh
Nirmalya has done his post graduate in business administration and now working as digital marketing executive in a US based firm. He loves to share the trending news and incidents with his readers. Follow him in Facebook or Twitter.