The Prime Minister of India, Dr. Manmohan Singh while inaugurating the India Expo Centre & Mart in Greater Noida on January 7th admitted that stringent domestic regulations and excessive controls have hampered the growth of the Indian textile industry. He expressed that despite the vast opportunities thrown up by the freeing of global textile trade last year, rigid domestic laws, complex rules, regulations and excessive controls inhibited the growth of an internationally competitive industry and overtaken by other textile exporting economies of Asia whereas, in 1948, India was the largest exporter of textiles this side of the Suez Canal. Though the Prime Minister did not make any specific reference to any policy related to the textile sector, it is important to note that he is the man in charge and responsible for future reforms in Govt. policy and schemes that would decide the future of Indian industry, where textile is a major shareholder. Going by the fact that Dr. Manmohan Singh is the father of economic reforms in the country, the realization by him that textile industry is shackled by stringent regulations could bring some far-reaching industry specific policy and regulation changes in the future.
In the past, policies created fragmented industry structure for the textile sector which again restricted the growth of large scale manufacturing as well
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| as level of technology deployed. Further, it also damped the entry of entrepreneurs with strict 'License Raj' in practice. Also, tariff and excise duty policies that have discriminated against manmade fibers have played a key role in deciding relative consumer prices and consumption patterns for cotton and manmade products. Specially, growth of man made fiber sector was hampered due higher excise duty structure.
Further, though there has been relaxation on many restrictions on private foreign investment as a whole as well as for textile sector, total in flow of FDI to the textile sector is negligible (about 1 percent) even today. According to a survey by World Bank, bureaucracy and multiplicity of regulations are seen as major impediments to FDI in both the textile sector and other areas of India's economy. This is an important matter to address with utmost urgency. Another such issue is government's labor policy. This is a matter which is cited by the industry as a principal constraint on firm size, investment, and international competitiveness.
India, which has moved slower than other key textile exporting countries, needs to further restructure government policy and boost private investment to compete more effectively in the global markets. Despite the numerous reforms in the textile sector and industry friendly schemes, lot more needs to be done on the policy related issues for a globally competitive textile industry. 
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