The art of textile making began to develop in the Stone Age. The first textile fabric was probably a nonwoven crude felt, made by compressing loose clumps of fleece from wild sheep. The second stage was invention of yarn which was extracted from various barks of various plants in accordance to their availability. Flax was the first natural textile fibre to be discovered followed by wool, cotton, silk, etc. The history of textiles in India dates back to nearly five thousand years to the days of the Harappan civilisation. Evidences that India has been trading silk in return for spices from the 2nd century have been found. This shows that textiles are an industry which has existed for centuries in our country. Cotton has always been associated with ancient India. The earliest cotton textiles, found at the site of the Indus Valley excavations can be reliably dated to 3000 B.C. Indian Khadi and handloom industry was so efficient that even the rising machine industry couldn´t compete with it. Towards the end of the 17th century, the British East India Company had begun exports of Indian silks and several other cotton fabrics to other economies. These included the famous fine Muslin cloth of Bengal, Odisha and Bihar. Although after the industrial revolution in Europe, inexpensive machine-made goods from factories in England flooded India and India lost the supremacy as a manufacturing country of Textile goods. The modern textile industry took birth in India in the early nineteenth century when the first textile mill in the country was established at fort Gloster near Calcutta in 1818. The cotton textile industry, however, made its real beginning in Bombay, in 1850s. The first cotton textile mill of Bombay was established in 1854 by a Parsi cotton merchant then engaged in overseas and internal trade. The first textile mill was established in Bombay in 1851 and the early nineteenth century resulted in the development and growth of many textile mills in India and by 1913-14 there were more than 150 mills and almost 96688 looms in the country. They offered unfair competition to the handloom industry.
In the post-independence, till about the late 1980s, the Government of India had put numerous policies and regulations to ensure that mechanisation did not occur and that labour-intensive textiles were produced which discouraged large-scale production by restrictions on total capacity and mechanisation of mills. The labour regulations did not allow capital investment and resulted in high production costs. Imposition of price restrictions, along with decreased productivity, severely hampered the competitiveness of the sector.
Recently, there has been a sizeable increase in the demand for Indian textiles in the market. India is fast emerging as a competitor to China in textile exports. The Government of India has also realised this fact and lowered the customs duty and reduced the restrictions on the imported textile machinery. The intention of the government´s move is to enable the Indian producers to compete in the world market with high quality products. The results of the government´s move can be visible as Indian companies like Arvind Mills, Mafatlal, Grasim; Reliance Industries have become prominent players in the world. The Indian textile industry is the second largest in the world, second only to China. The other competing countries are Korea and Taiwan. Indian Textile constitutes 35 per cent of the total exports of our country.
India´s textile industry which is 196 years old, since its beginning, continues to be predominantly cotton based with about 65 percent of fabric consumption in the country being accounted for by cotton. The industry is highly localised in Ahmedabad and Bombay in the western part of the country though other centres exist including Kanpur, Calcutta, Indore, Coimbatore, and Solapur. All the efforts of the government encouraged textile units to invest over Rs 74,000 crore on plant and machinery