India has the largest area under cotton cultivation in the world and ranks third in terms of crop production. cotton textile comprises cotton fibre, cotton yarn and fabrics made out of the cotton yarn where cotton yarn commands almost 70% of spun yarn. The year 2003-04 saw a negative growth of 3.1% in cotton textiles. However in the financial year 2004-05 it has shown a rise of 7.7%. In the year 2004-05, the export of cotton based textile items consisting of cotton yarn, fabrics, made-ups and ready-made garments stood at US$7.76 billion, whereas the exports of man-made textile items was at US$ 2.56 billion.
With the phasing out of the quota system the Indian textile market has seen a spurt of activities all across the industry. India has the largest area under cotton cultivation in the world and ranks third in terms of crop production. cotton textile comprises cotton fibre, cotton yarn and fabrics made out of the cotton yarn where cotton yarn commands almost 70% of spun yarn. The year 2003-04 saw a negative growth of 3.1% in cotton textiles. However in the financial year 2004-05 it has shown a rise of 7.7%. In the year 2004-05, the export of cotton based textile items consisting of cotton yarn, fabrics, made-ups and ready-made garments stood at US$7.76 billion, whereas the exports of man-made textile items was at US$ 2.56 billion.
With the phasing out of the quota system the Indian textile market has seen a spurt of activities all across the industry. The analysis of Q2 result gives us the idea that textile industry is one of the best performers after hotels, paper and construction sectors. For the second quarter ended
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| September 30, 2005, in general, sales have moved up by 70% and net profits have moved by 81.51% for the top nine companies. Mahavir Spinning Mills has registered a growth of 40.9% in sales to Rs 459.60 crore. Net profit has jump by 131.09% to touch Rs 39.91 crore. Similarly Arvind Mills, Abhishek Industries and Sutlej Industries have shown a continual surge in their performance. Their net profit have registered a growth of 84.66%, -4.16% and 34.31% respectively while sales figure moved up by 0.87%, 23.04% and 15.65% respectively.
Bumper crop and resultant lower prices of raw cotton have ensured the growth of cotton textile industry this year, too, at the cost of synthetic and blended textiles. Production of cotton yarn has increased by 8.6 % and cotton textiles by 18.4 % up to July. In addition to the bumper crop the other factor that is driving the growth of cotton textiles is a strong demand.
Looking at a wider picture, with population more than a billion, the country accounts for a very low per capita consumption of textiles. India's per capita consumption is at 2.2 kg, which is very low when compared to China's 5 kg and Pakistan's 3 kg. Analysts believe that the present per capita consumption in terms of length is expected to move up from 19 metres to 32 metres by the end of 2010. This is indeed a positive signal for the industry. In order to keep up with this increased demand, various government schemes have also seen a steep rise. There is an increase of 85% in funds allocated to the Technology Upgradation Fund Scheme (TUFS) in 2004-05 over the average amount of 1999-2004. With hardly any bottlenecks now, we could certainly say that Indian textile industry is weaving the script for a success story. 
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