Cotton Textile Industry in India

Understanding Localization Through Historical Development

To truly understand why the cotton textile industry is where it is today, we must walk a bit into the past and trace the causes, patterns, and shifts in location over time.

1. The British-Era Beginnings – Port-Based Industry

Imagine India during colonial times—rich in cotton but poor in machinery and power resources. So, how would you set up a textile industry? Near a port. Why?

• Maharashtra’s Mumbai became the natural choice:
  • Black lava soil in nearby Vidarbha region—perfect for cotton cultivation.
  • Humid marine climate of Mumbai—ideal for spinning yarn (humidity reduces thread breakage).
  • Mumbai Port: It became a “break-of-bulk” centre—where large shipments are divided into smaller ones for easier transport. This reduced costs.
  • Coal was imported from Durban (South Africa)—as India lacked its own energy resources.
  • Entrepreneurial culture and cheap labour from Maharashtra, Gujarat, and Konkan fuelled the industry’s growth.

But success brings its own problems. Over time, congestion, labour strikes, pollution, and infrastructure issues forced the industry to disperse. Mumbai could not hold on to its dominance forever.

2. Gujarat Emerges – The Natural Successor

Now imagine a place just like Mumbai—but even better suited.

• Ahmedabad, Bharuch, Surat, Baroda—these cities rose as cotton industry hubs.
  • Located in the heart of cotton-growing areas.
  • Marine humid climate helped spinning.
  • Access to Mumbai and Kandla ports for trade.
  • Strong rail and road network.
  • Availability of finance and cheap labour.

Gujarat offered all of Mumbai’s advantages, minus the urban problems. A textbook case of industrial shift due to push and pull factors.

3. Southern India – The Silent Riser

Initially, the South was a consumer, not a producer, of cotton textiles.

• It lacked:
  • Raw material
  • Energy sources
  • Influence of industries in Mumbai and Ahmedabad

But then came irrigation projects and hydroelectric plants (like Mettur, Pykara). This transformed the region:

• Cotton cultivation increased
• Power became available
• Coimbatore, with access to Kochi and Madras ports, rose to prominence
• Fewer labour issues than Mumbai or Ahmedabad

Hence, Coimbatore earned the title: “Hosiery Capital of the World.”

4. Other Regions: Lesser Yet Notable Players

Kolkata Region (Hooghly-Howrah Belt)

• Despite setting up India’s first mill, growth was stunted due to lack of raw cotton.
• Later grew due to:
  • Developed transport
  • Port facilities
  • Cheap labour and industrial base

Punjab

• Initially served as a break-of-bulk centre for northwest India.
• Post Green Revolution, farmers had capital and began growing cotton (even though it wasn’t native).
• Good transport network aided industrial development.

Problems Faced by Cotton Textile Industry in India

Let’s now address the elephant in the loom—the challenges.

1. Cotton Crop – A Gamble with Monsoon

• Cotton is a Kharif crop, and 62% is rain-fed.
• Monsoon failures mean supply issues.
• Overproduction one year, scarcity the next—industries can’t plan properly.
• India produces long-staple cotton, but still imports some for quality needs.

2. Low Yields

Despite being a major producer, our per hectare output is among the lowest due to:

• Multiple, inefficient varieties
• Low inputs, poor mechanization
• Fragmented landholdings

It’s like owning a gold mine, but digging it with a spoon.

3. Technological Backwardness

• Outdated machinery
• Low labour productivity

We have century-old machines trying to compete in the AI age.

4. Skewed Sectoral Growth

• Spinning sector = World-class (produces fine yarn)
• Weaving, knitting, processing = Fragmented, small-scale, outdated

So, yarn is exported, but fabric is imported—a tragic irony. This also means job losses and low domestic value addition.

5. Loss of Global Market

• High production costs and rising competition from Bangladesh (which ironically imports our cotton and exports garments).
• We’re losing the value-added game.

6. Other Challenges

• Power supply is unreliable.
• Labour reforms are slow—leads to strikes and disruptions.
• Synthetic fibres are emerging competitors.
• Poor marketing, branding, and global presence.

In Summary

The Indian Cotton Textile Industry is a classic case of potential versus problems.

We have:

• Raw material
• Entrepreneurial history
• Global-class spinning sector

But we lack:

• Modernization
• Integration
• Stability in raw cotton supply

If India wants to become a global textile powerhouse, it must:

• Modernize its weaving and processing
• Improve yields and irrigation
• Build on regional strengths and industrial ecosystems

This is not just a story of cotton—it’s a mirror to Indian manufacturing’s journey.

Top Cotton Producers, Importers and Exporters

• India is currently the world’s largest producer of cotton, benefiting from vast agricultural land, favorable climatic conditions, and a large rural workforce. However, despite its leadership in raw cotton production, India faces challenges such as low yields, dependence on monsoons, and fragmented landholdings.
• Globally, China remains the largest importer of cotton, as its massive textile industry often demands higher volumes and specific quality grades of cotton, which are supplemented through imports from countries like the U.S., India, and Australia.
• On the other hand, the United States is the leading exporter of raw cotton, thanks to its highly mechanized and high-yield farming systems. India also features prominently among the top exporters of cotton and cotton yarn, especially to countries like Bangladesh, China, and Vietnam.
• However, India’s textile sector exports face limitations due to weak downstream segments like weaving and processing. Thus, while India plays a dominant role in the global cotton ecosystem, it continues to grapple with internal inefficiencies that limit its full export potential.