Even with the rupee plunging, India remains the most competitive nation in the world in cotton yarn.The industry operates under extremely low overheads, which are a tiny fraction of the overheads of comparable companies in any other industry. India’s operating machine speed in spinning and weaving is 30 per cent higher compared to China’s. Most Indian mills follow lean manufacturing, even if they are not familiar with the concept.

Power, labor and equipment are the key factors that have made the Indian textile industry intrinsically competitive. Exporting mills of the power-starved south get 50 per cent of their power needs from their own windmills. The decentralised sector has learnt to optimise production by increasing the capacity of low-cost machines and running as much of the facility as possible only during nights. 

Almost all export companies across sectors have in-house training facilities capable of converting unskilled and uneducated workers into world-class operatives who can operate highly sophisticated state-of-the-art machines within three months.However, there are several factors that have impacted the profitability of the cotton industry. Holding back cotton sales and creating an artificial scarcity helped traders increase cotton prices well over international prices. This, in turn, affected India’s export competitiveness and made mills lose money. The high Duty Entitlement Pass Book given to yarn exports impacted the competitiveness of the value-added sectors.