Policy Update
Gauri Khanna
Brief History
Before 1976, the Department of Export Promotion took care of matters related to the textile industry under the Ministry of Commerce. A separate Department of Textiles was established to focus on this sector in March 1976. However, in 1977, its responsibilities were divided between the Ministry of Industry (for development) and the Ministry of Commerce (for exports), and the department was dissolved. It was revived in April 1980, and finally, on 15th November 1985, the Ministry of Textiles was established as an independent ministry to oversee all aspects of the textile sector in India.
The Ministry of Textiles is responsible for formulating policies, planning, development, export promotion, and trade regulation for the textile industry in India. This covers both natural and man-made cellulosic fibres used in textiles, clothing, and handicrafts. Non-cellulosic synthetic fibres like nylon, polyester, acrylic, and polypropylene come under the jurisdiction of the Ministry of Chemicals and Petrochemicals. The Ministry monitors the technology and economy of the textile industry and develops policies to support its growth and improvement. It also works with Textile Research Associations (TRAs) and gives them monetary assistance to conduct research and generate new ideas for the industry.
Vision of the Ministry of Textiles
The Ministry of Textiles aims to make India a global leader in textile manufacturing by building a strong and modern textile industry. The goal is to reach a size of US$ 250 billion and achieve US$ 100 billion in exports by 2030. To do this, the focus is on using advanced technologies, promoting sustainable practices, and creating large-scale infrastructure. The Ministry wants to support traditional crafts, generate jobs, especially in rural areas, and make India self-reliant in producing raw materials.
Key Objectives
Making India a Global Leader in Textile Manufacturing: The Ministry of Textiles is working towards making India one of the top countries in the world for producing textiles. This will include encouraging large-scale production, adopting modern technologies, and improving the quality of textile goods. The goal is to increase India’s competitiveness in the global market by promoting innovation, increasing efficiency, and ensuring that Indian textiles meet international standards.
Supporting Traditional Crafts: India has a rich heritage of handlooms and handicrafts, which reflects the diversity of India. The ministry wants to promote these traditional crafts by supporting local artisans and craftspersons. This involves providing training, better tools, funds and platforms to showcase their work.
Achieving Self-Reliance in Raw Material Production: India imports its raw material from other countries. So the ministry decided to reduce this dependency by encouraging domestic production of key raw materials like cotton, silk, wool, and synthetic fibers. They will do this by supporting farmers, improving agricultural practices, and promoting research.
Strengthening Branding, Market Linkages, and Global Presence: To raise the demand for Indian textiles, the Ministry is working on building a strong brand identity. They will do this by participating in global trade fairs, online platforms, and marketing campaigns.
Major Initiatives under the Ministry of Textiles
The Textile industry is one of the largest sources of employment generation in India, with forty-five million people directly involved in this sector, including a large number of women and rural people. Taking into account the employment potential of the textile sector, the government is promoting investment in this sector, which will create more job opportunities.
SAMARTH Scheme
The SAMARTH was launched under the Skill India initiative. It focuses on training youth to meet industry demands, especially in rural and traditional sectors. The scheme was functional till March 2024.
Amended Technology Upgradation Fund Scheme (ATUFS)
The Amended Technology Upgradation Fund Scheme helped textile units modernise by offering subsidies for buying advanced machines (excluding spinning). It encouraged environment-friendly, energy-efficient production under the Make in India vision and ran until March 2022.
National Technical Textile Mission (NTTM)
This mission (2020–2024) aimed to boost the use and production of technical textiles across key sectors like agriculture, defence, and healthcare. With a budget of ₹1,480 crore, it also focused on innovation and research.
Production Linked Incentive (PLI) Scheme
The PLI scheme aims to boost man-made fibre (MMF) apparel and technical textiles, targeting 60 to 70 global champions. It seeks to attract ₹19,000 crore in investments and generate 750,000 jobs.
PM-MITRA Parks
This major initiative aims to establish seven mega textile parks with world-class facilities by 2027–28. With an investment of ₹4,445 crore, these parks are designed to attract significant investment, enhance exports, and offer “plug and play” infrastructure for industries.
Contribution to the Economy
Boost to Exports
The Ministry’s export promotion schemes have improved India’s global competitiveness. Textile exports reached US$ 34.4 billion in 2023-24, contributing over 8% to India’s total exports.
Support for Micro, Small and Medium Enterprises
Nearly 80% of India’s textile capacity lies within Micro, Small and Medium Enterprises.
Cluster Initiatives like ATUFS, the Textile Cluster Development Scheme (TCDS), and credit support policies have helped small units modernise and become more productive.
Skill Development
The Samarth scheme has trained over 3.82 lakh individuals, with a high placement rate (77.74%), improving workforce quality and supporting youth employment.
FDI & Investments
Investor-friendly policies, including Make in India and incentives like the PM MITRA Parks, have attracted over US$ 4.4 billion in FDI from 2000 to 2024, reflecting strong global investor confidence.
Infrastructure Modernisation
PM MITRA Parks are across seven states and aim to develop world-class textile hubs. This will reduce the costs and enhance the ease of doing business.
Challenges faced by the Ministry of Textiles
Poor Achievement of Targets
Only 30% of employment, 50% of investment, and 37% of textile unit establishment targets were achieved even after the scheme was implemented sixteen years ago. Many parks classified as “completed” were still not used.
High Cancellations and Delays
Out of 98 sanctioned parks, 42 (43%) were cancelled, and only 26 were completed, with many parks still unfinished for over 10 years despite timelines of 18 to 36 months.
Non-Integrated Parks
Only 3 out of 17 audited parks had a fully integrated textile value chain (spinning, weaving, processing, and garmenting). This fragmentation increased costs and reduced competitiveness.
Premature Sanctioning Without Completion
The Ministry sanctioned 65 new parks during the 11th and 12th plans without ensuring the completion of 33 parks approved during the 10th plan.
Misuse of Government Grants
Another problem with the Ministry of Textiles is that ₹122.61 crore was given to cancelled parks, but ₹77.34 crore remains unrecovered. Second-hand machinery was approved in Surat Super Yarn Park, which became inoperative, leading to the closure of the park within a year. The misuse of grants also became an obstacle to achieving the targets.
Future Outlook
India can compete in the textile industry with other global powers if strategic measures are implemented. In contemporary times, many foreign brands dominate the markets, particularly in urban areas. To reduce the presence of these foreign brands in India, our textile industries need to advance their machinery to match international standards. The promotion of AI-oriented machines in the textile sector should be promoted.
While maintaining the authenticity of traditional textiles, it is crucial to make certain modifications to ensure that clothing is more comfortable and wearable on a daily basis. Creating strategic trade partnerships with developed countries will also play a crucial role in making our textile Industry more advanced.
To address the issue of pollution created by the textile industry, the government should offer incentives or benefits to those producers who use sustainable dyes, invest in eco-friendly research and development, conserve water, and use renewable energy sources in their factories.
The textile industry will have to focus on inter-ministerial coordination for holistic development among the Ministries of Commerce, Environment, and Education, which is vital. The monitoring policy implementation through digital dashboards and independent impact assessments will help ensure the performance of the textile industry.
Conclusion
The Ministry of Textiles is actively working on the implementation of policies to promote the growth and modernisation of the textile sector. To support research, encourage innovation, and improve infrastructure, the Ministry aims to enhance the industry’s competitiveness both at the domestic level and the global level. The government is encouraging the textile industry by organising exhibitions to promote artisans in events like the Surajkund Mela, the India International Garment Fair (IIGF), and the India Handloom Brand Exhibitions. The Bharat Tex event highlighted India’s textile capabilities by focusing on sustainability, innovation, and traditional skills. It included over 70 educational sessions, numerous product launches.
References
About the Contributor
Gauri Khanna is a research intern at IMPRI.
Acknowledgement
The author sincerely thanks Ms Aasthaba Jadeja and the IMPRI fellows for their valuable contributions.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
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