In expectation of increased revenue generation as well as employment, the government has streamlined the anomalies in taxation that used to exist in the textile industry, is providing subsidized loans to companies for technological upgradation, and is also acting as a facilitator to bring together the players in the industry. The textile industry in India is highly fragmented, and therefore the government’s role in achieving some kind of consolidation in the industry has been appreciated.

Textile industrialists have gone in for mergers and acquisitions in order to gain economies of scale. Several companies have closed down the small units which were started during an era which provided incentives for small production units, and are now expanding production capacities and moving up the value chain.