Cotton Textile Industry in India : Production,

Growth and Problems

Rabin Karmakar ,Raghunathpur college

Raghunathpur , purulia

Growth and Development:

India held world monopoly in the manufacturing of cotton textiles for about 3,000 years
from about B.C. 1500 to A.D. 1500. In the middle ages, Indian cotton textile products
were in great demand in the Eastern and European markets.

The muslins of Dhaka, chintzes of Masulipatnam, calicos of Calicut, baftas of Cambay

and gold-wrought cotton piece goods of Burhanpur, Surat and Vadodara acquired a
worldwide celebrity by virtue of their quality and design.

This industry could not survive in the face of strong competition from the modern mill
industry of Britain which provided cheap and better goods as a result of Industrial
Revolution in that country. Moreover, the British textile industry enjoyed political
advantage at that time.

The first modem cotton textile mill was set up in 1818 at Fort Glaster near Kolkata. But
this mill could not survive and had to be closed down. The firat successful modem
cotton textile mill was established in Mumbai in 1854 by a local Parsi entrepreneur C.N.
Dewar. Shahpur mill in 1861 and Calico mill in 1863 at Ahmedabad were other
landmarks in the development of Indian cotton textile industry.

The real expansion of cotton textile industry took place in 1870’s. By 1875-76 the
number of mills rose to 47 of which over 60 per cent were located in Mumbai city alone.
The industry continued to progress till the outbreak of the First World War in 1914. The
total number of mills reached 271 providing employment to about 2.6 lakh persons.

The First World War, the Swadeshi Movement and the grant of fiscal protection
favoured the growth of this industry at a rapid pace. Demand for cloth during the
Second World War led to further progress of the industry. Consequently, the number of
mills increased from 334 in 1926 to 389 in 1939 and 417 in 1945. Production of cloth
also increased from 4,012 million yards in 1939-40 to 4,726 million yards in 1945-46.

The industry suffered a serious setback in 1947 when most of the long staple cotton
growing areas went to Pakistan as a result of partition. However, most of the cotton
mills remained in India. Under such circumstances, India faced a severe crisis of
obtaining raw cotton.

The country had, therefore, to resort to large-scale imports of long staple cotton which
was an extremely difficult task in view of the limited foreign exchange reserves. The only
solution to this problem was to increase hectare-age and production of long staple
cotton within the country. This goal was achieved to a great extent in the post partition
era.

Present Position:
At present, cotton textile industry is largest organised modem industry of India. There
has been a phenomenal growth of this industry during the last four decades. About 16
per cent of the industrial capital and over 20 per cent of the industrial labour of the
country is engaged in this industry. The total employment in this industry is well over 15
million workers.

There are at present 1,719 textile mills in the country, out of which 188 mills are in
public sector, 147 in cooperative sector and 1,384 in private sector. About three-fourths
were spinning mills and the remaining one-fourth composite mills. Apart from the mill
sector, there are several thousand small factories comprising 5 to 10 looms.

Some of them have just one loom. These are based on conventional handloom in the
form of cottage industry and comprise decentralised sector of this industry. Table 27.4
shows that the constitution of decentralised sector is much more than the organised
sector.

It has increased rapidly from a mere 19.31 per cent in 1950-51 to 58.96 per cent in 1980-
81 and made a sudden jump to 87.95 per cent in 1990-91. It gradually improved during
the first half of 1990s and stood at 94.63 per cent in 2003-04. (see Table 27.4)
Production:
Cotton cloth is produced in three different sectors viz., 1. Mills, 2. Power-looms and 3.
Handlooms.

1. Mills:
The mill sector played a dominant role in cotton textile industry at the initial stage.
But its importance was reduced drastically with the growth of powerlooms and
handloom. The share of mill sector in cotton cloth production came down from
80.69 per cent in 1950-51 to only 5.37 per cent in 2003-04.

2. Powerlooms:
The decentralised powerloom sector plays a pivotal role in meeting the clothing
needs of the country. The production of cloth as well as generation of employment
has been rapidly increasing in powerloom sector. This sector not only contributes
significantly to the cloth production in the country but also provides employment to
millions of people.

The powerloom industry produces a wide variety of cloth with intricate designs.
The powerloom sector accounts for about 63 per cent of the total cloth production
in the country and contributes significantly to the export earnings.

3. Handlooms:

The handloom sector provides employment to over 65 lakh persons engaged in

weaving and allied activities. The production of handloom fabrics registered more than
fifteen fold increase from 500 million sq metres in 1950-51 to 7,585 million sq metres in
2001-02. This sector constitutes nearly 14 per cent of the total cloth produced in the
country and also contributes substantially to the export earnings.

Table 27.4 shows that the production of spun yam and cotton cloth has increased
considerably during the 53 years from 1950-51 to 2003-04. The production of spun yarn
registered more than fourfold increase from 533 million kg in 1950-51 to 2,121 million
kg in 2003-04.
Although the total production of cotton cloth increased considerably, the share of mill
sector has been drastically reduced. This is an indication of our efforts to decentralise
the industry and create greater employment opportunities.

There are about 40 lakh handlooms and about 5 lakh powerlooms in the decentralised
sector. Although they are widely distributed throughout the country, states of Tamil
Nadu, Uttar Pradesh, Assam and Manipur account for nearly 50 per cent of the
production capacity.

The rest are scattered in Nagaland, West Bengal, Madhya Pradesh, Andhra Pradesh.
Maharashtra, Kerala, Rajasthan, Haryana and Jammu and Kashmir. Table 27.5 shows
that power looms contribute an overwhelmingly large percentage of production of
fabrics.

Table 27.5 Production of Cotton Cloth (Mill Cloth) in India, 2002-03:

State/Union Territory Production in Sq Percentage of all

Mtr India production

1. Maharashtra 3,82,257 39.38

2. Gujarat 3,21,775 33.14

3. Tamil Nadu 64544 6.69

4. Punjab 55,784 5.75

5. Madhya Pradesh 47305 4.87

6. Uttar Pradesh 32386 334

7. Rajasthan 28384 2.92

8. Pondicherry 24357 2.51

 9. Karnataka 7,222 0.74

10. Kerala 6342 0.66

Total 9,70,756 100.00

Locational Factors:
Several factors, like availability of raw cotton, market, transport, etc. play a key role in
the localisation of cotton textile industry. The significance of raw cotton is evident from
the fact that 80 per cent of the industry is coterminous with the cotton growing tracts of
the country.

Some of the important centres such as Ahmedabad, Solapur, Nagpur, Coimbatore and
Indore are located in the areas of large scale cotton cultivation.

Mumbai is also not far away from the cotton producing areas of Maharashtra and
Gujarat which have contributed a good deal in the localisation and growth of cotton
textile industry here. It is equally important to note that cotton is a pure raw material, in
the sense that it does not lose much of its weight in the process of manufacturing and
the slight loss in weight is more than compensated by the use of sizing materials.

There is not much of difference between the cost of transporting raw cotton and finished
cloth. Both can be transported with equal ease and without adding much to the total cost
of production. Hence, this industry normally tends to be located at such centres which
have favourable transport facilities with respect to market. In other words, it is primarily
a market oriented industry.

With tropical and sub-tropical climate, all parts of India provide vast market potential
for cotton textile industry. West Bengal, Bihar, Uttar Pradesh, Kerala and Orissa do not
grow cotton and still have large number of big centres where cotton textile industry has
flourished well.

Thus although in earlier stages of industrialisation, cotton textile manufacturing was

concentrated in Mumbai, it has witnessed great spatial spread and now covers almost
the entire country. Since, it was a traditional cottage industry, cheap and skilled labour
was readily available. The most notable feature of the distribution of the industry is that
even within a state, the industry is localised within particular areas and regions, almost
to the complete exclusion of others..

Dispersal of industry from the old nuclei started after 1921 with railway lines
penetrating into the peninsular region. New centres like Coimbatore, Madurai,
Bangalore, Nagpur, Indore, Solapur and Vadodara were favourably located in respect to
raw material, market and labour than places of original locations. This industry also
reached some places with some additional advantages, such as nearness to coal
(Nagpur), financial facilities (Kanpur) and wide market with port facilities (Kolkata).

Dispersal of cotton textile industry was further boosted with the development of
hydroelectricity. The growth of this industry in Coimbatore, Madurai and Tirunelveli is
largely due to the availability of hydroelectricity from Pykara dam. The industry also
tended to shift from areas of high labour cost to those with low labour cost. The labour
cost factor played a crucial role in establishing this industry at Madurai, Turunelveli,
and Coimbatore.

Distribution:
Although cotton textile mills are located in over 80 towns and cities of India, yet its
larger concentration is found in Maharashtra, Gujarat, West Bengal and Uttar Pradesh.
Table 27.5 and Figure 27.1 show the spatial distribution of cotton textile industry in
India.

Maharashtra:
Maharashtra excels all other states in the development of cotton textile industry. It
produces 39.38 per cent mill cloth and 10.79 per cent yarn of India. About three lakh
workers are engaged in this industry in Maharashtra. Mumbai is the largest centre in
India having 63 mills out of Maharashtra’s total of 122 mills. Mumbai is rightly called
the Cottonopolis of India.

Following are the main reasons of phenomenal growth of cotton textile industry in and
around Mumbai.
(i) Mumbai enjoys humid climate which is helpful for this industry because thread does
not break so frequently.

(ii) Mumbai is a very important port which helps in import of machinery and long staple
cotton and export of cloth.

(iii) Cheap hydro-electricity is readily available from the nearby areas.

(iv) The black-cotton soil in the hinterland of Mumbai provides cotton as the basic raw
material.

(v) Cheap labour can be drawn from the surrounding areas.

(vi) There is ready market for Mumbai products both in India and abroad.

(vii) Mumbai is well-connected by a network of roads and railways which help in easy
transportation of raw material and finished goods.

(viii) Facilities for washing and dyeing also exist here.

(ix) There is no dearth of capital inputs.

(x) Mumbai has the advantage of an early start.

Apart from Mumbai, Solapur, Pune, Kolhapur, Satara, Wardha, Nagpur, Aurangabad,
Amravati, Akola, Sangli, Chaligaon, Miraz, Mander, Jalgaon, etc. are other centres of
cotton textile industry in Maharashtra.

Gujarat:
Gujarat is the second largest producer of cotton textiles. This state accounts for over 33
per cent of the mill cloth and over 8 per cent of the yam production of the country.
Ahmedabad is the largest centre where 73 out of 118 mills of Gujarat are located.
Ahmedabad is the second largest centre of cotton textile industry after Mumbai.
Following facilities are available to Ahmedabad:

(i) Ahmedabad lies near the main cotton belt of India and there is no problem of
obtaining raw cotton.
(ii) Climate is humid and is suited to this industry.

(iii) Cheap power is readily available.

(iv) Cheap and skilled labour is drawn from the nearby areas.

(v) Ahmedabad is served by a network of railways and roadways.

(vi) Land at Ahmedabad is much cheaper as compared to that in Mumbai.

(vii) Most of Ahmedabad mills produce cheap cloth which finds a ready market among
the poor masses of India.

The other important centres of Gujarat are Vadodara, Bharach, Surat, Rajkot,
Porbandar, Maurvi, Bhavnagar, Viramgam, Sidhpur, Kelot, Kadi, etc.

Madhya Pradesh:
Cotton is locally grown. Coal provides necessary energy. Abundant cheap labour is
available due to backward economy of the masses. Gwalior, Ujjain, Indore, Dewas,
Ratlam, Jabalpur, Bhopal, etc. are important centres.

Tamil Nadu:
Among the southern states, Tamil Nadu is an important cotton textile producer.
Although Tamil Nadu produces only about 6 per cent of the mill cloth of India, the state
excels all other states in the production of yam and accounts for over 44% of the total
yam production of the country.

Coimbatore is the most important centre having 200 mills out of Tamil Nadu’s 439 mills
and is known as Manchester of South India. But Tamil Nadu’s mills are of smaller size
and give comparatively less production. Other important centres are Chennai (10 mills),
Madurai, Tirunelveli, Tirucchchirappalli, Salem, Perambur, Tuticorin, etc.

West Bengal:
Kolkata is the most important centre of West Bengal. It enjoys facilities of a port, humid
climate, coal from Raniganj, local labour due to high density of population and those of
dyeing and washing. But Kolkata suffers from the disadvantage of being away from the
main cotton- producing areas of India. The other important centres are Haora,
Murshidabad, Hugli, Sirampur, Shiampur and Panihar.

Uttar Pradesh:
Most of cotton textile industry has developed in the western part of Uttar Pradesh.
Kanpur is the largest centre and is known as Manchester of Uttar Pradesh. This city has
10 out of 52 cotton textile mills of the state. Other important centres are Moradabad,
Varanasi, Agra, Bareilly, Aligarh, Modinagar, Saharanpur, Rampur, Etawah, Lucknow,
Mirzapur, etc.

Other producers are detailed as below:

Andhra Pradesh:
Hyderabad, Secunderabad, Guntur, East Godavari and Udayagiri.

Kerala:
Thiruvananthapuram, Alleppey, Kollam, Trichur, Alwaye.

Bihar:
Gaya, Patna, Bhagalpur

Rajasthan:
Pali, Beawar, Vijayanagar, Kishangarh, Ganganagar, Bhilwara, Udaipur, Jaipur, Kota,
Ajmer.

Punjab:
Amritsar, Ludhiana, Phagwara.

Haryana:
Bhiwani, Hissar, Rohtak.

Karnataka:
Bangalore, Belgaum, Mangalore, Chitradurga, Devangera, Gulbarga, Chennapatnam,
Mysore.
Problems of Cotton Textile Industry:
Although cotton textile is one of the most important industries of India, it suffers from
many problems. Some of the burning problems are briefly described as under:

1. Scarcity of Raw Cotton:

Indian cotton textile industry suffered a lot as a result of partition because most of the
long staple cotton growing areas went to Pakistan. Although much headway has been
made to improve the production of raw cotton, its supply has always fallen short of the
demand. Consequently, much of the long staple cotton requirements are met by
resorting to imports.

2. Obsolete Machinery:
Most of the textile mills are old with obsolete machinery. This results in low productivity
and inferior quality. In the developed countries, the textile machinery installed even 10-
15 years ago has become outdated and obsolete, whereas in India about 60-75 per cent
machinery is 25-30 years old.

Only 18-20 per cent of the looms in India are automatic whereas percentage of such
looms ranges from cent per cent in Hong Kong and the USA., 99 per cent in Canada, 92
per cent in Sweden, 83 per cent in Norway, 76 per cent in Denmark, 70 per cent in
Australia, 60 per cent in Pakistan and 45 per cent in China.

3. Erratic Power Supply:

Power supply to most cotton textile mills is erratic and inadequate which adversely
affects the production.

4. Low Productivity of Labour:

Labour productivity in India is extremely low as compared to some of the advanced
countries. On an average a worker in India handles about 2 looms as compared to 30
looms in Japan and 60 looms in the USA. If the productivity of an American worker is
taken as 100, the corresponding figure is 51 for U.K. 33 for Japan and only 13 for India.
5. Strikes:
Labour strikes are common in the industrial sector but cotton textile industry suffers a
lot due to frequent strikes by a labour force. The long drawn strike in 1980 dealt a severe
below to the organised sector. It took almost 23 years for the Government to realise this
and introduce legislation for encouraging the organised sector.

6. Stiff Competition:
Indian cotton mill industry has to face stiff competition from powerloom and handloom
sector, synthetic fibres and from products of other countries.

7. Sick Mills:
The above factors acting singly or in association with one another have resulted in many
sick mills. As many as 177 mills have been declared as sick mills. The National Textile
Corporation set up in 1975 has been striving to avoid sick mills and has taken over the
administration of 125 sick mills. What is alarming is 483 mills have already been closed.

Exports:
India is a major exporter of cotton textiles. Cotton yarn, cloth and readymade garments
form important items of Indian exports. Indian garments are well known throughout
the world for their quality and design and are readily accepted in the world of fashion.
Table 27.7 shows the export trends of cotton textile products from India. It is clear that
export of readymade garments has increased tremendously since 1960-61.