India’s textiles sector is grappling with a range of challenges, despite having a comprehensive value chain, as per the Economic Survey 2024-25. The report indicates that insufficient FDI inflows have stalled technological progress, causing continued reliance on imported textile machinery.
The sector, largely controlled by MSMEs, struggles with scale and efficiency issues, alongside the logistical costs associated with its fragmented nature. A key concern raised is the sector’s heavy dependence on cotton, which impedes its competitiveness globally, as other markets shift towards manmade fibers.
While India’s textile exports have seen fluctuations, the focus remains on diversifying export regions. With the emerging growth in the technical textiles segment, supported by government initiatives like the PLI scheme, the sector aims to enhance its position globally, though challenges remain.