Overview of Fashion and Textile Industry in India

Overview of Fashion and Textile Industry in India


The Indian Fashion Industry is one of the fastest growing industries in the world and has been gaining global recognition for its creativity, diversity, and sustainability.

The Indian fashion industry has developed from the earlier eras of home-made stitched clothing to the modern eras of trendy global brands and fashion entering the Indian Market. Both during and before the era of British rule, ethnic wear such as “sarees” for women and “dhotis” for men were prevalent, which then slowed due to British influence and was subsequently replaced by pants and shirts. Post-Independence, India saw the birth of its own fashion industry wherein modernization whilst keeping traditional aesthetics in place was considered trendy and in fashion.

India’s urban and educated class favored western styles, which helped preserve European design, while the rural population preferred to wear traditional clothes. Since urbanization, the Indian fashion industry has been recreating itself time and again from implementing modern ideas into fashion and clothing to also picking up brands from the western world.

The Indian fashion industry has gone through a tremendous change. Fusion fashion is becoming more and more popular among the youth of India. In the past few years, the fusion of modern, antique, and Indo-western styles has gained enormous popularity. Fusion clothing has developed to the point that prestigious fashion labels include such components in their lineups.

Today popular brands such as Armani, Hermes, Dolce & Gabbana, Gucci, Burberry, Bottega Veneta, Balenciaga, Valentino, Versace, Dior, Louis Vuitton John Player, Monte Carlo, Adidas, Zara, Marks and Spenser, Jack and Jones, Vero Moda and Only have set up their stores in Tier 1 and Tier 2 cities of India and are thriving in the India Markets.

Foreign Direct Investment in the Textile Sector

The Indian government has granted up to 100% FDI (thus, without the need of involving local shareholders/partners) in the textile sector under the automatic route wherein the foreign entity wishing to invest into the Textile sector can do so entirely without the requirement of obtaining any approval from the government of India, with the exception of Press note 3 of 2020. India being the largest producer of cotton and jute and second largest producer of polyester, silk and fibre in the world marks a prominent place for many renowned textile industries globally.

The abundant availability of raw materials such as cotton, wool, silk, jute, and artificial fibers has led India to be one of the world’s largest producers of textiles and garments.

Benefits Provided by the Indian Government in the Textile Sector

At present, India is the second largest manufacturer of textiles and apparel in the world. With the numerous benefits provided by the Indian government, the fashion industry is seeing a welcoming change. The Government of India has launched various schemes, policies and initiatives including “Skill India” and “Make in India”, programs that help in generating employment in the country especially among women and the rural population of the country.

The Indian Government, in order to promote the textile sector in the country has launched various schemes, such as:

(1)Scheme for Capacity Building in Textile Sector (SAMARTH) a broad policy framework that caters to the skilled artisans of India in order to promote their initiatives and generate the manpower requirement for these artisans across the country;

(2) Amended Technology Up-Gradation Fund Scheme (ATUFS) is scheme to promote exports through Make in India with Zero effect and Zero defects in manufacturing and also provides for Capital Investment subsidies for purchasing machinery in the Textile sector;

(3) National Technical Textile Mission was established for developing the usage of technical textiles in various flagship missions & programmes of the country including strategic sectors;

(4) Scheme for Integrated Textile Parks (SITP) provides support for creation of world-class infrastructure facilities for setting up of textile units;

(5) Production Linked Incentive (PLI) Scheme was launched to promote production of man-made fibers apparels, create global players and attract fresh investment of Rs. 190 billion (approximately USD 2.32 billion) and generate almost 0.7 million new employment opportunities;

(6) Integrated Processing Development Scheme (IPDS) lays down guidelines for the textile industry to follow international environment standards while manufacturing garments and supporting new Common Effluent Treatment Plants (CETP)/ the upgrade of CETPs in existing processing clusters as well as new processing parks specially in the Coastal Zones.

The government of India has also granted special packages for the Textiles and Apparel sector wherein the government has granted Rs. 60 billion to boost employment and export potential in the apparel and made-up segments. Another grant provided by the Government is for the research and development in the technical textile sector, wherein Rs. 10 billion has been granted for advanced research and innovation in technical textiles to make it on par with the best in the world. Research topics include fibers and composites, geo textiles, agro-textiles, protective textiles, medical textiles, defence textiles, sports textiles, and environmentally friendly / biodegradable technical textiles to name but a few.


Due to the various initiatives taken by the government, textile production and exports from India have continued to perform better year on year. The export of textiles and apparel from India during April-January 2021-22 stood at USD 34.459 billion, posting a growth of 49% over USD 23.137 billion in the same period in FY 2020-21.

India being a land of multiculturalism and massive diversity is reflected in the variation of traditional garments and the dressing styles that differ from one state to another, holding a large market for domestic consumption. In addition, the country has become an attractive destination for FDI in the Indian textile industry due to the foreign direct investment policy.

It is expected that from USD 103.4 billion in 2020-21, the textile and apparel sector will grow up to USD 190 billion by 2025-26.

Bosky Tanmay Gokani Bosky Tanmay Gokani

Bosky Tanmay Gokani

Legal Advisor
Bosky Gokani, a qualified Indian lawyer, is currently based in Shanghai.
Veronica Gianola Veronica Gianola

Veronica Gianola

Senior Associate
Veronica Gianola, an accomplished Italian lawyer, is a member of the Milan Bar Association.

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