The Indian textile industry is on the roll. All the major indicators of performance such as installed capacity, production, consumption and so-on have shown promising trend during the decade, 1994-2004. These trends are observed amidst reports that the industry's fortunes are in the upswing. The installed number of cotton and man-made fibre textile mills increased from 1175 in 1994 to 1787 by the year 2004 registering an increase of around 52 percent. The growth has been mainly due to the increased set up of spinning mills which was 909 during 1994 increased to 1564 in 2004 as the installed spindleage increased from 28.6 million to reach around 34 million during the same period registering an addition of 5.42 lakh spindles. Besides, there has been an increase in rotors too, which was around 3.83 lakh in the year 2004. Besides there are small scale spinning units many of them are set up in and around Coimbatore in Tamil Nadu as the total number of such mills were 1135 with an installed capacity of 3.01 mn spindles and 98717 rotors as on 2004. The number of mills lying closed was 1787 units, which include composite mills by the year 2004 and 28 percent of the installed capacity of the spindleage, were lying idle.

The yarn production in the Indian textile industry is almost entirely produced from the organised mill sector. The production of spun yarn has been steadily increasing in tandem with the increase in spinning capacity. During the year 1993-94, the cotton spun yarn production, which was around 80 percent of the total spun yarn production declined in the recent years and was 69 percent of the total spun yarn production during the year 2003-04 and the remaining 31 percent was in the form of blended and 100 percent non-cotton yarn. The trend in the cotton yarn production has always been with the trend in the cotton crop production. In case of 100 percent non-cotton yarn production, there has been an increasing trend in production, which was 7 percent of the total production increased to 11 percent of the total yarn production in 2003-04.

Production of cloth is primarily from the decentralised sectors. Five segments of the textile industry, namely, mills, powerlooms, handlooms, hosiery and khadi produce cloth. The cloth production by the mil sector has declined from 7 percent in 1993-94 to 3 percent in 2003-04 and that of the decentralised sectors consisting of hosiery and powerloom sectors has increased from 13 and 57 percent in 1993-94 to 18 and 64 percent respectively in 2003-04. The decentralized sectors (all four) together contribute about 97 percent of the total cloth production leaving only 3 percent of the total that is contributed by the mill sector.

Textile and clothing is always the single largest foreign exchange earning source for the country accounting for 21 percent of the country's total export earnings. The cotton textiles have always been a significant source accounting for 27 percent of the total textiles and clothing exports in 2003-04. The garments account for 46 percent of the total textile and clothing exports. Imports of all kinds of fibres - cotton, wool, MMF, silk and jute, yarns and fabrics of all fibres are on the increase. In case of fibre 38 percent, in yarn 66 percent, in fabrics, 220 percent, in made-ups 44 percent, in garments 79 percent increase in imports in value terms during the last 5 years ending 2003-04.