Government Considers ₹40,000-Crore Plan to Modernise Textile Clusters

Proposed Five-Year Programme Could Upgrade Traditional Weaving, Processing and Garment Manufacturing Infrastructure

The government is considering a ₹40,000-crore plan to modernise India’s traditional textile and garment clusters over five years, with the aim of improving their competitiveness and operational efficiency. The proposed initiative would focus on infrastructure and technology upgrades, with the expenditure plan being examined by the Textile Expansion and Employment (TEEM) Scheme.

The programme could also support traditional textile activities and strengthen manufacturing capabilities in clusters across the country.

TEEM Scheme Under Consideration

The proposed modernisation plan is part of the broader TEEM Scheme, which is intended to support textile and garment manufacturing, expand trade opportunities under free trade agreements (FTAs) signed by India, and strengthen production capabilities.

The Ministry of Textiles has proposed a significant increase in expenditure, and the matter is being examined by an interministerial body under the expenditure secretary. The proposal forms part of wider government spending plans for 2026–27.

Cluster Upgrades and Modernisation Priorities

The government has not yet finalised the list of clusters to be upgraded. However, potential locations identified in the report include Tiruppur, Coimbatore, Surat, Ahmedabad, Varanasi, Bhilwara, Ludhiana and Kanchipuram.

The proposed work could cover different parts of the textile value chain, including traditional weaving, processing and garment manufacturing. The plan is expected to prioritise infrastructure and technology improvements to help clusters improve productivity and competitiveness.

Textile Sector’s Economic Contribution

The ₹179-billion textile and garment sector is described in the report as India’s second-largest employer after agriculture. It accounts for approximately 8% of the country’s industrial value added.

The sector’s contribution to manufacturing and employment is among the factors cited in discussions around the proposed modernisation programme.

Additional Support for Traditional Textile Activities

The proposal could also include support for traditional textile units and activities, including a possible major skilling initiative. The report identifies handloom and handicraft programmes as potential areas of focus, alongside broader improvements to textile infrastructure.

The proposed programme is expected to be demand-driven, with cluster-level identification of requirements. Further details, including the final list of clusters and the scope of individual projects, are yet to be confirmed.