How to Start a Textile Business in India

About Textile Business

The textile industry is considered one of the best industries in the business sector. The textile and garment industry has a close relationship with the fashion and design industry. The reason is that the textile industry supplies fabric to these sub-industries. Read here to know in detail how textile industries work in India and how to set up your textile industry. With so many options available in the textile industry, it is important that before starting the business, understand the specific requirements of the textile business.

Know About the Market Trends in the Context of the Textile Business in India

The textile industry’s current contribution is marked as 2% of GDP in India. In terms of percentage, it is 15% of the earnings of India. The textile business in India is one of the largest across the world and most popular for manufacturing cotton. India is one of the largest producers of cotton and jute in the world.

Reason for the Increasing Popularity of the Textile Industry in the World

  • The Indian government has formulated many policies and incentives that are favorable for all the textile business owners of India.
  • Make an easy availability of abundant raw materials such as cotton, jute, silk, and wool.
  • One of the major reasons for setting up the textile business in India is that it has a good team of skilled manpower in the entire value of textile manufacturers.

Benefits of Having a Textile Home Business in India

  • It is a full-time opportunity to grow business along with enjoying consistency in revenue generation in the textile business.
  • The smallest expenditure always gives higher and profitable business returns.
  • The smallest textile business in India expands globally as a brand at a faster pace.
  • For small textile business owners, it is easier to remain active on social media platforms.
  • Easier to build up a reputable customer base
  • Easier to make a connection with suppliers and wholesalers
  • The textile business is a never-ending business.

What Are the Registrations Required to Set Up a Textile Industry in India?

When starting a retail shop or manufacturing sector as a part of the textile industry, there are some registrations required to be done mandatory.

  • Registering the textile business as Private Limited, Limited Liability Partnership, single-handed partnership, or a company of one person.
  • For Company Registration: When you are planning to do company registration for the textile business, the Ministry of Corporate Affairs has created a Spice form wherein they are checking the name's uniqueness, doing the registration, applying for the director identification number, and incorporation certificate.
  • One has to apply for a digital signature certificate on behalf of partners, proprietors, and directors.
  • Trademark registration
  • Udyog Aadhaar MSME Registration: If your textile business is a micro-enterprise, the investment made in plant and machinery is not allowed to exceed Rs. 25 lakhs. If it is small, investment to be made in plant and machinery is allowed only for up to Rs. 5 crores. For the medium-scale textile industry, the investment is allowed up to Rs. 10 crores. One can easily submit the Udyog Aadhaar MSME registration online.
  • GST Registration: It is a mandatory registration to be done for operating any business in India whose annual turnover is exceeding Rs. 20 lakh per annum. One indulges in inter-state business only if they are having a GST number.
  • ESIC Registration: If in a textile company, more than 10 employees are working and getting Rs. 15,000 as monthly wages. It is a must for a company to do EPFO registrations.

List of Additional Licenses Required in the Textile Manufacturing Unit

  • Pollution license from the state pollution control board—before setting up any textile manufacturing plant, it is a must to apply for a license from the state pollution board.
  • Factory license Apart from pollution licensing, one is also required to have a factory license for registering the textile company with the local authorities who are part of taking care of all the factors related to the risk management system in that particular area.

Starting a Textile Unit Retail Shop

Before starting a textile business in India, it is mandatory to obtain a Shop & Establishment Act license from the Department of Labor or the state government. The act is regulating the working hours, leave policies, wage payments, and service terms and conditions.

SWhat Is the Textile Industry Scenario Shortly?

The apparel and textile business in India has spread its value chain. Ranging from products like fabric, yarn to apparel are huge in demand. The sector is highly diversified and has a variety of segments in the market such as handicrafts, wools, silk products, and traditional handlooms. The importance of the textile business all over the world has increased. The reason is the use of capital-intensive technology. It helps a lot in producing textile products like processing, and manufacturing of garments, silk products, and apparel at the mass level.

Furthermore, this sector is showing a huge scope of growth all over the world. As the Government of India is also taking a lot of initiatives for its growth of the textile business. Prime Minister Narendra Modi has approved the production-linked incentive scheme in the textile industry. It helps a lot in the enhancement of manufacturing capabilities and export business.

Steps to Start a Textile Business in India

  1. Do market research
  2. The foremost requirement to start a textile business in India is market research. Due to the increasing demand in India, one must be aware of the market trends and competitors’ strategies. Find out which product is more in demand in the textile sector before starting the business. It must know the fabric which is generating most of the sales all over the world. After choosing the fabric, know your target audience. For a textile business owner, it is a must to research to keep up-to-date about the developments happening in the market. Identify the problem areas also to avoid facing drawback product rejections when you start your textile business.

  3. Go for competition analysis
  4. If you are a small textile business owner, then you must do a competition analysis. A small textile owner has to face tough competition both from global and regional garment manufacturers as compared to the established ones. If you are planning to start a business online, it is a must to go for competitor analysis to stand above the established industry leaders. All this will be a great help in creating the best online marketing plan for the growth of the textile business.

  5. Know the market
  6. Whenever you are planning to start a textile business in India, it is safer to consult those who are old in the textile business. Research for the factors like:

    • Demand for the product
    • To run a successful textile business, it is a must to understand the product's nature. The demand for the product may not be the same in all the regions. To understand well, one has to do the survey areas-wise for determining the same.

    • Pricing
    • You can only decide the right pricing strategy when you study the pricing strategy of your competitors.

  7. Work on your business plan
  8. Creating a well-versed business plan is a must to convert your business ideas into a reality. The business plan works as a reference to describe the mission and vision of starting the textile business. A business plan is a way of getting investors for expanding the business. A good business plan must cover the following points:

    • Description of the business
    • Overview of the business plan
    • Product description
    • Market trend analysis
    • Team management, etc.
  9. Make connections with vendors for textile printing and connection
  10. If you are planning to start the textile business of production or printing, always look for vendors to get the supply of the raw materials. The latex products are used by many in digital textile printing.

  11. Search for the best-quality fabric
  12. To start the textile business, start searching for manufacturers and vendors for getting the best quality fabric. Always take some caution at the time of purchasing high-quality fabrics. Search some unique outlets of fabrics that are specialized in weaving textiles and dying of the fabrics. It is like adding value to the regular offerings.

  13. Managing the cash flow
  14. No matter that you are having sufficient cash flow to start the textile business. Always prepare yourself for any of the financial contingencies to avoid hampering the business operations. Apply for a small business credit card to make secured online purchases for dealing with any financial emergencies. The benefit of using a credit card is that you can avail yourself of the frequent cashback and discount offers while using the card for your textile business.

  15. Prefer the best location
  16. When you are in the textile business, location matters a lot. It is a major factor on which your business success depends. Make sure that your textile factory is well-connected with your target audiences. The area has an abundant supply of electricity and water.

  17. Master in time management skills to handle the textile business
  18. To run a successful textile business, the person must be well-versed in managing time. Always meet the deadlines of the client without making any compromise in the quality of fabric. You need to follow disciplined behavior as it will help in maintaining a long-term relationship with the client. It is the most important step to follow for running the textile business.

  19. Choose the best transportation for the textile business
  20. It is also one of the important steps to start the textile business in India. Make sure that the cost of transportation does not make holes in your pocket. It should come under the budget. So, before starting a textile business, always go for cost analysis. It will help in planning finances well.

  21. Opt for the best advertising strategies to promote your textile business
  22. After completing the comprehensive planning, it is time to concentrate on strategic planning to take your textile business further. Prepare a marketing plan and think about the right ways to make people aware of the business. Try spreading the word to as many prospective clients as possible about your textile business. Use the best social media platforms for creating brand awareness and information about the products you are focusing on in your textile business. The popular social media platforms for expanding the business are Facebook, Twitter, Instagram, and LinkedIn.

  23. Find a place to keep the bulk storage when you are starting the textile business
  24. When you are in the textile business, it is most important to find a place for keeping bulk storage. Along with the shop, look for a warehouse to store the extra raw materials and fabrics. Not having fabrics storage space may result in wasting or spoiling the raw material. It may result in huge losses in your textile business.

  25. Don’t think about profit or loss in the initial years of the textile business
  26. The only way to make the textile business successful is to keep focusing on the break-even stage of the business. Make yourself prepared to run the textile business without any profit for a couple of years. Always prefer to purchase the plant and machinery from the best company, when you are starting the textile business. Never make compromises in the quality of the fabric. When you buy the best, even the cost is higher; however, the best part is that it comes with a long-term guarantee. Focus only on customer service in the initial years of the textile business.

  27. Understand the manpower requirement
  28. For running the best of the textile business, it is necessary to recruit semi-skilled and qualified labor, which ensures better output. When you are supplying the best in the textile business, the demand for the product automatically increases. Resultantly, your brand will make huge profits and stand above its competitors.

  29. Make the reach easier for your target audience
  30. Always try to establish an active footprint in purchasing cycles for catching the prospective buyers at the initial stage of the textile business. It makes it easier to make a business presence in all the areas where your target audience is present and boosting brand visibility. You will also get the best of RFQs (request for quotations) for your textile business.

Indifi Business Loan Fees & Interest Rates For Textiles Business

Following are the business loan fee & interest rates for textiles business.

Customized Interest RatesStarting @1.5% PM
Processing Fees3%
Loan Tenureup to 3 years
Pre-closure Charges4%
Eligibility Criteria> 5L Turnover in last 6 Months
Loan Amount₹ 50,000 – ₹ 50 Lakhs
Installments Monthly

When it comes to starting a textile business, the most important is experience. When you are a part of the textile business, stay connected with the world of fashion and design. It will help you in a better understanding of the market trends of the textile business. After doing a thorough study of the textile world, understanding the market trends, and competitors, you can easily make a successful start to your textile business.

Frequently Asked Questions


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We need your

  1. Pan Card
  2. Aadhaar Card
  3. Address proof of self and firm
  4. Business registration proof
  5. Bank Statement last 6 months.
    In case of loan more than 15 lacs, latest ITR


When asked, most business owners shared that access to capital is the single biggest roadblock to growing their businesses. With more cash flow, these businesses can hire new employees, purchase more inventory, take more orders, upgrade equipment and boost their marketing efforts.