Before the middle of the nineteenth century, India used to export cotton to Britain, and then reimport the textiles. In 1820, the total textile import cost only Rs. 350,000. However, these costs escalated tremendously and in 1860 textile imports stood at Rs. 19.3 million.

The impetus towards the founding of a cotton textile industry came from Indian entrepreneurs. The first Indian cotton mill, “The Bombay Spinning Mill”, was opened in 1854 in Bombay by Cowasji Nanabhai Davar. Opposition from the Lancashire mill owners was eventually offset by the support of the British manufacturers of textile machinery.

By 1870, there were 13 mills in Bombay. Cotton exports grew during the American Civil War, when supplies from the USA were interrupted. At the end of 1895 there were 70 mills; growing to 83 in 1915. A period of stagnation set in during the recession of the 1920’s. In 1925 there were 81 mills in the city. After World War II, under strong competition from Japan, the mills declined. In 1953 there remained only 53 mills in the city.