Development Council For Textile Industry (DCTI), 2026: Strengthening India’s Textile Sector

Policy Update
Tanisha Hooda

Background

The textile and apparel industry is an important part of India’s economy, contributing to employment, exports and industrial development. However, the sector faces several challenges, including gaps in production capacity, limited integration across different stages of the value chain, raw-material constraints, technological gaps and barriers to accessing international markets. Addressing these issues requires better coordination between the government, industry associations, research institutions and other stakeholders.

To facilitate this coordination, the Development Council for Textile Industry (DCTI) was constituted as an apex consultative platform to advise the Government on the orderly growth and development of the textile industry. Its first meeting was held on 6 October 2026 at Vigyan Bhawan, New Delhi, under the chairpersonship of Smt. Neelam Shami Rao, Secretary, Ministry of Textiles. The meeting brought together representatives from industry associations, export promotion councils, research associations, state governments and other sector experts to discuss the key challenges and future priorities of the industry.

The discussions focused on improving production and productivity, strengthening research and development, expanding textile exports, ensuring the availability of raw materials, and encouraging investment, skill development and sustainable production practices. Particular attention was given to modernising the industry, supporting micro, small and medium enterprises (MSMEs), promoting technical textiles and new-age fibres, and improving access to global markets.

The Council’s effectiveness will depend on its ability to identify sector-specific bottlenecks, prioritise actionable recommendations and facilitate follow-up by the relevant government departments and industry stakeholders.

Functioning

The functioning of the textile industry requires coordinated efforts to enhance technological capabilities, improve productivity, strengthen infrastructure, promote skill development, and increase competitiveness in domestic and international markets. Various government initiatives and institutional mechanisms support these objectives by encouraging modernisation, facilitating investment, and addressing structural challenges across the textile value chain.

1. Technology Upgradation and Modernisation: Technology upgradation is essential for improving productivity and competitiveness in the textile industry. The Ministry of Textiles introduced the Amended Technology Upgradation Fund Scheme (ATUFS) in January 2016 to encourage investment in modern machinery through credit-linked capital investment subsidies. As reported up to 31 March 2022, 14,389 unique identification numbers (UIDs) had been issued under ATUFS, covering estimated project costs of ₹69,160 crore.

However, the current operational status of ATUFS needs to be verified through official sources before drawing conclusions about its ongoing availability. Building on the experience of such technology-upgradation initiatives, the Development Council for Textile Industry (DCTI) can facilitate consultations with industry stakeholders to identify technological gaps, assess modernisation requirements, and recommend measures to strengthen technology adoption across the textile value chain.

2. Skill Development and Workforce Productivity: A skilled workforce is essential for improving efficiency and meeting the changing needs of the textile industry. The Ministry of Textiles implements the Samarth scheme, which provides demand-driven, placement-oriented training across the textile value chain. It also supports the upskilling and reskilling of existing workers, particularly in apparel and garmenting. DCTI can help identify emerging skill requirements and advise on aligning training programmes with industry demand and technological changes.

3. Infrastructure Development and Integrated Textile Parks: Infrastructure development helps reduce production and logistics constraints and improves coordination between different stages of textile manufacturing. Under the PM-MITRA scheme, the government aims to establish integrated textile and apparel parks in partnership with state governments.

These parks are intended to provide modern industrial infrastructure and bring different stages of production closer together. DCTI can provide a platform for discussing infrastructure gaps, investment barriers and coordination between the government and industry to support a more integrated textile value chain.

4. Research, Innovation and Export Competitiveness: Research and innovation can help India’s textile industry improve product quality and compete in international markets. Stronger industry–research linkages can facilitate the commercialisation of innovations in technical textiles and new-age fibres. DCTI can identify barriers relating to technology transfer, product certification, logistics and market access, and recommend measures to strengthen research commercialisation and export competitiveness.

5. Raw Material Availability, MSME Support and Sustainability: The availability of raw materials at stable and competitive prices is essential for maintaining production costs and ensuring the smooth functioning of the textile value chain. Key supply-side concerns include the availability and pricing of cotton, man-made fibres, yarn, dyes and chemicals, as well as access to reliable market intelligence. Other priorities include improving the ease of doing business, strengthening support for micro, small and medium enterprises (MSMEs), and encouraging sustainable and circular production practices. DCTI can prioritise specific supply-side bottlenecks, including input-price volatility and difficulties faced by MSMEs, and recommend measures to improve supply-chain reliability and resource efficiency.