India’s textile and apparel sector has historically been a cornerstone of its economy, intricately woven into its social and economic fabric. Contributing significantly to the national GDP, industrial output and export revenues, this sector directly employs approximately 45 million people, with an additional 100 million indirectly reliant on its allied sectors. As India grapples with employment generation and economic stability, a strategic focus on textile manufacturing policies becomes indispensable. Recognising this, the Government of India has introduced a series of reforms and policies over the years to modernise, expand and globalise the textile and apparel sector.
Overview of Indian Textile and Apparel Policies
Textile policies in India have progressively evolved from protective measures to proactive development strategies aimed at global competitiveness. In recent years, the Indian government’s vision has broadened from traditional textiles towards promoting technology-driven and export-oriented apparel manufacturing.
The Central Government, under the latest budget allocation for FY 2024-25, has significantly increased funding to Rs. 4,417.03 crore (US $ 523 million), demonstrating strong intent towards sectoral transformation. Key initiatives include employment-linked incentives (ELIs), increased credit support for MSMEs, skilling of 20 lakh youth and schemes enhancing women’s workforce participation, aligning closely with global ESG mandates. To position India as one of the top three global producers and exporters of textiles and apparel by 2030, driven by world-class infrastructure, skilled human capital and a sustainable ecosystem are essential that embrace innovation and value addition.
India’s textile policy aims to boost exports and expand global market share through product diversification and compliance. Key initiatives include attracting investments via schemes
like PM MITRA and PLI, enhancing supply chain integration and supporting sustainability through green technologies and circular practices. The policy also emphasises skill development, adoption of Industry 4.0 and improved ease of doing business with world-class textile parks. Export diversification beyond traditional markets is a priority, leveraging FTAs with new regions.
Synergies between Central and State Policies
By understanding and leveraging the interconnectedness between central and state policy frameworks, investors can unlock substantial value, minimise risks and build scalable, globally competitive textile businesses.
A well-calibrated alignment between central government initiatives and statespecific policies is emerging as one of the most powerful enablers of successful textile and apparel investments in India. While each state offers a unique mix of capital subsidies, power rebates, skilling incentives and tax exemptions, these benefits are significantly magnified when strategically combined with central government schemes.
Case study: Raipur in Chhattisgarh – The emerging industrial centre has become a cost-effective destination for large-scale textile manufacturing, particularly in underpenetrated regions. The state offers a 35 per cent capital subsidy capped at Rs.300 crore (US $ 35.58 million), along with 12-year electricity duty exemptions and stamp duty waivers—ideal for capital-intensive projects. When coupled with central government schemes like PLI for Textiles and PM MITRA, manufacturers in Chhattisgarh have benefited from dual-layered incentives that lower both set-up and operating costs. For instance, a homegrown spinning and dyeing unit in Raigarh successfully leveraged state incentives for infrastructure and power, while utilising central skill training schemes to onboard over 800 workers.
Opportunities for Stakeholders
The evolving textile policy landscape in India is generating a multitude of dynamic opportunities across the entire value chain, creating a fertile environment for diverse stakeholder engagement. Manufacturers stand to gain significantly from capital expenditure (CAPEX)-linked subsidies, access to plug-and-play infrastructure within modern textile parks and operational cost reductions through power and wage subsidies. These combined benefits make diversifying operations not only feasible but highly attractive. Exporters benefit from targeted incentives such as SGST reimbursements, freight cost support and market development assistance—measures that enhance price competitiveness and enable entry into newer markets.
Technology providers and automation solution firms are witnessing growing demand, especially from manufacturers transitioning to Industry 4.0. With state-backed encouragement for digital transformation and sustainability, there’s a surge in adoption of IoT, AI, ERP systems and intelligent manufacturing technologies. Investors and financial institutions now find greater predictability and clarity in ROI.
| A well-calibrated alignment between central government initiatives and state-specific policies is emerging as one of the most powerful enablers of successful textile and apparel investments in India |
Meanwhile, training and skilling partners are emerging as critical enablers, especially in labour-intensive clusters. With significant allocations to schemes like SAMARTH and state ITI modernisation programmes, there is an expanding window for public-private partnerships focused on building a future-ready workforce. Moreover, sustainability focused stakeholders—including green certification agencies, ETP/ZLD system providers and ESG compliance consultants—are positioned for long-term growth as environmental governance and sustainable sourcing become central to both policy mandates and international buyer expectations.
Collectively, these interconnected opportunities allow stakeholders not only to participate in India’s textile growth story but also to drive innovation, sustainability and inclusive economic transformation.
Strategic Recommendations for Investors
Investment decisions must consider various parameters, including product type, market orientation (domestic versus export) and incentive structures. For instance:
- Technical textiles and advanced manufacturing: Gujarat, Telangana, Maharashtra
- Labour-intensive garmenting: Odisha, Bihar, Jharkhand
- Export-driven units: Tamil Nadu, Andhra Pradesh, Haryana investors must strategically balance CAPEX and OPEX incentives, leveraging state and central policies to offset initial investment costs and sustain operational profitability.
Challenges and Risk Mitigation
Investors frequently encounter challenges such as infrastructural inadequacies and skilled labour shortages. To mitigate these, proactive strategies include leveraging policy incentives for infrastructure (e.g., plug-and-play parks), close collaboration with state agencies for regulatory navigation and structured engagement with local skilling initiatives.
Groyyo Consulting advises adopting an integrated approach—engaging deeply with policy makers and utilising local networks—to navigate challenges proactively and sustainably.
Future Outlook and Opportunities
Emerging trends indicate increasing integration of Industry 4.0 technologies and sustainability practices. Indian states are rapidly adopting green manufacturing and digitalisation, aligning with global ESG standards and enhancing global competitiveness. Anticipated policy enhancements promise greater ease of doing business, streamlined regulatory processes and targeted financial incentives. Investors should closely monitor upcoming policy revisions, specifically around green manufacturing, skill development and employment generation schemes, to maintain competitive advantage.
The strategic alignment of central and state textile policies holds significant potential for India’s textile industry growth, export enhancement and employment generation. As the General Manager at Groyyo Consulting, my experience underscores that successful textile manufacturing investments rely significantly on strategic insights, detailed policy understanding and proactive government collaboration. Groyyo Consulting continues to be your partner in navigating these complexities, ensuring informed, optimised and profitable investments. This article aims to empower stakeholders with comprehensive insights, guiding informed investment decisions and fostering success in India’s textile and apparel landscape.
