(i) India has a large share in the world trade of cotton yarn but its trade in readymade garments is only 4 per cent of the world’s total.
(ii) India’s spinning mills are competitive at the global level and capable of using all the fibres produced.
(iii) But the weaving, knitting and processing units cannot use much of the high quality yarn that is produced in the country.
(iv) There are some large and modern factories in these segments, but most of the production is in fragmented small units, which cater to the local market.
This mismatch is a major drawback for the industry. As a result, many Indian spinners export cotton yarn while garment manufacturers have to import fabric.