The textile industry in India traditionally, after agriculture, is the only industry that has generated huge employment for both skilled and unskilled labour in textiles. The textile industry continues to be the second-largest employment generating sector in India. It offers direct employment to over 35 million in the country. The share of textiles in total exports was 11.04% during April–July 2010, as per the Ministry of Textiles. During 2009–2010, the Indian textile industry was pegged at US$55 billion, 64% of which services domestic demand. In 2010, there were 2,500 textile weaving factories and 4,135 textile finishing factories in all of India. According to AT Kearney’s ‘Retail Apparel Index’, India was ranked as the fourth most promising market for apparel retailers in 2009.
India is first in global jute production and shares 63% of the global textile and garment market. India is second in global textile manufacturing and also second in silk and cotton production. 100% FDI is allowed via automatic route in textile sector. Rieter, Trutzschler, Saurer, Soktas, Zambiati, Bilsar, Monti, CMT, E-land, Nisshinbo, Marks & Spencer, Zara, Promod, Benetton, and Levi’s are some of the foreign textile companies invested or working in India.
The archaeological surveys and studies have found that the people of Harrapan civilization knew weaving and the spinning of cotton four thousand years ago. Reference to weaving and spinning materials is found in the Vedic Literature. There was textile trade in India during the early centuries. A block printed and resist-dyed fabric, whose origin is from Gujarat was found in the tombs of Fostat, Egypt. This proves that Indian export of cotton textiles to the Egypt or the Nile Civilization in medieval times were to a large extent. Large quantity of north Indian silk were traded through the silk route in China  to the western countries. The Indian silks were often exchanged with the western countries for their spices in the barter system. During the late 17th and 18th century there were large export of the Indian cotton to the western countries to meet the need of the European industries during industrial revolution, apart from the domestic requirement at the Indian Ordnance Factories.
India is the second largest producer of fibre in the world and the major fibre produced is [cotton]. Other fibres produced in India include [silk], [jute], [wooL], and [man-made fibers]. 60% of the Indian textile Industry is cotton based. The strong domestic demand and the revival of the Economic markets by 2009 has led to huge growth of the Indian textiles industry. In December 2010, the domestic cotton price was up by 50% as compared to the December 2009 prices. The causes behind high cotton price are due to the floods in Pakistan and China . India projected a high production of textile (325 lakh bales for 2010 -11). There has been increase in India's share of global textile trading to seven percent in five years. The rising prices are the major concern of the domestic producers of the country.
In the early years, the cotton textile industry was concentrated in the cotton growing belt of Rajasthan, Maharashtra and Gujarat. Availability of raw materials, market, transport, labour, moist climate and other factors contributed to localisation. In the early twentieth century, this industry played a huge role in Bombay's economy but soon declined after independence. While spinning continues to be centralised in Maharashtra, Gujarat and Tamil Nadu, weaving is highly decentralised. As of 30 September 2013, there are 1,900 cotton textile mills in India, of which about 18% are in the private sector and the rest in the public and cooperative sector. Apart from these, there are several thousand small factories with three to ten looms.
India exports yarn to Japan, United States, United Kingdom, Russia, France, Nepal, Singapore, Sri Lanka and other countries. India has the second-largest installed capacity of spindles in the world, with 43.13 million spindles (30 March 2011) after China. Although India has a large share in world trade of cotton yarn, its trade in garments is only 4% of the world's total.
India is the largest producer of raw jute and jute goods and the second largest exporter after Bangladesh. There were about 80 jute mills in India in 2010-11, most of which are located in West Bengal, mainly along the banks of the Hooghly River, in a narrow belt (98 km long and 3 km wide).
In 2010-2011 the jute industry was supporting 0.37 million workers directly and another 400,000 small and marginal farmers who were engaged in the cultivation of jute.
Challenges faced by the industry include stiff competition in the international market from synthetic substitutes and from other countries such as Bangladesh, Brazil, Philippines, Egypt and Thailand. However, the internal demand has been on the rise due to Government policy of mandatory use of jute packaging. To stimulate demand, the products need to be diversified. In 2005, the National Jute Policy was formulated with the objective of improving quality, increasing productivity and enhancing the yield of the crop.
MINISTRY OF TXTILES ANDBINDUSTRIE
Government of India passed the National Textile Policy in 2000. The major functions of the ministry of textiles are formulating policy and coordination of man-made fiber, cotton, jute, silk, wool industries, decentralization of power loom sector, promotion of exports, planning & economic analysis, finance and promoting use of information technology. The advisory boards for the ministry include All India Handlooms Board, All India Handicrafts Board, All India Power looms Board, Advisory Committee under Handlooms Reservation of Articles for Production and Co-ordination Council of Textiles Research Association. There are several public sector units and textile research associations across the country.