The Gujarat textile industry is facing a crisis, due to the absence of a textile policy for the past ten months now which has led to companies leaving the state. The previous textile policy lapsed on December 31, 2023, and since then no new policy has been introduced and Gujarat government has provided no indication of when it will be introduced.

The lack of a textile policy has resulted in severe repercussions for the industry. The big companies are leaving for Jharkhand, Maharashtra and Tamil Nadu with more attractive and profitable policies than Gujarat. 

While Gujarat remains a major producer of cotton, the region’s capabilities in yarn and fabric production are lagging. The cotton harvested in Gujarat is increasingly sent to neighbouring states like Maharashtra and Tamil Nadu for processing into yarn and fabrics. 

Gujarat has immense potential for growth in the textile sector, particularly in yarn and fabric production. With its extensive coastline, the state is well-positioned to enhance its processing capabilities. However, the lack of supportive policies and incentives has hindered the establishment of new spinning companies.

Industry leaders are calling for immediate action by the Gujarat government, urging the introduction of a comprehensive textile policy that promotes small and new cotton industries. They propose increasing spinning capacity by 50% to revitalise the sector and suggest for a reduction in electricity rates for small industries by ₹2 per unit, along with interest subsidies on capital investments.

The textile sector can create numerous job opportunities if the government prioritises the development of spinning and fabric manufacturing. 

Without a conducive environment and supportive policies, new players are struggling to enter the market, which ultimately affects the state’s economy.

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