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Challenges faced by textile industry in India

What are the problems faced by the textile industry in India?

The textile industry in India is a very old industry which is important to the economic growth of the country. Although there are a myriads of problems that the industry is facing.

 Below are some of the challenges faced by the textile industry in India.

Outdated Machinery:

The majority of the cotton textile factories in India have outdated equipment. Over 50% of the spindles in India are older than 25 years. The percentage of automatic looms in the country is only 18 percent. Because of low output and poor quality caused by outdated machinery, Indian textile products are unable to compete on the global market. A dire need to update the old machinery with the new age technology is needed.

Raw material shortage:

35% of the overall cost of production is determined by the cost of raw materials. Cotton is in low supply in the nation, especially long-staple cotton that is imported from other countries. Low output and mill malfunction are a result of fluctuating pricing and unpredictability in the supply of raw materials.

Foreign market competition:

When you go on a global scale, the textile goods from South Korea, Taiwan, and Japan are cheaper and better in quality, which makes it very burdensome on the Indian textile market. This gives a fierce competition for the cotton textile products made in India on the international market.

Power Failure:

Most of the textile mills that are run in smaller towns and rural areas are facing shortage of power. Frequent electricity cuts in the area and supply chain issues for coal and load shedding makes it difficult and hampers production. This hinders not only production but also human resources

Low productivity by man power:

The average Indian worker can handle about 380 spindles and 2 looms on an average which is much lesser then compared to Japan or America. So the production goes down overall. There is also the problems of strikes, retrenchments and payoffs in this industry. Many workers are laid off due to insufficient funds to pay them

Cash Flow Issues: 

Cash flow issues is another problem faced by the textile industry, due to shortage of raw material and heavy excise duties there can be lack of funds. In many cases workers are not paid on time and the payroll is delayed. This leads to layoffs and more often than not the industry is unable to pay its employees on time. In such situation a payroll loan can be the answer to these problems.

When cornered with cash flow troubles one of the first concerns is always how to maintain staff and how to get them paid on time. But when you apply for a payroll funding it works similarly to a small business loan. You get access to quick cash influx without complicated procedures which one has to face when applying for a traditional loan. A payroll financing can help to cover payroll gaps when cash flow is running low. When employees get their salaries on time it increases their morale and productivity. They are happy and content. This will benefit the overall business, the funds that were going to go to payrolls can now be focused on other aspects like upgrading old machinery, or buying raw material.

Payroll financing can bring in a significant change in the textile industry in India.


India’s first ever digital portal to offer payroll funding, making every business owner’s dream possible through everyday capital realities.

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