top of page
Search

Vidarbha's Textile Collapse: Untangling the Loom of Industrial Decline

Vidarbha's Textile Collapse: Untangling the Loom of Industrial Decline
Vidarbha's Textile Collapse: Untangling the Loom of Industrial Decline

Vidarbha's textile industry stands at a critical juncture. Where once cotton mills operated at full capacity and employed thousands, industrial estates now show signs of severe stagnation.


Across the region's 98 industrial estates spanning 11 districts, 1,246 manufacturing units have shut down. Alongside these closures, another 3,906 allotted plots remain completely undeveloped, with no progress toward establishing new operations. The scale of this industrial collapse is staggering.


In Nagpur division alone, 829 units have ceased functioning despite being among the 7,506 allotted plots across 52 industrial estates. The Amravati division reports 417 closed units across 46 estates.


This contraction has triggered judicial intervention, with the Nagpur Bench of the Bombay High Court taking suo motu cognisance of the crisis in October 2025. The court designated the matter as a public interest litigation, acknowledging that thousands of workers face joblessness whilst vast tracts of industrial land lie unutilised.


The Value Chain Breakdown and Processing Deficit


Despite producing nearly one-third of Maharashtra's cotton annually, Vidarbha fails to process most of what it grows.


The region generates approximately 6.2 million tonnes of cotton each year, yet around 70 per cent of this output leaves Vidarbha for processing elsewhere.

This represents a fundamental failure in the region's industrial architecture. After cotton is harvested, it must undergo ginning, spinning, weaving, and dyeing to become finished fabric. The region possesses adequate ginning capacity, with pressing units processing significant volumes of cotton.


However, the absence of comprehensive spinning, weaving, and processing infrastructure forces raw cotton to travel to Gujarat and other states, where processors extract the value addition. This gap in the value chain directly undermines Vidarbha's economic potential.


The consequences of this structural deficiency are severe. When cotton leaves the region as raw material, Vidarbha loses the employment and revenue that processing generates.


A single textile factory manufacturing denim requires purchasing 30 per cent of its yarn requirements from outside the state due to local supply shortages. This dependency increases production costs and reduces competitiveness.


The financial impact is equally dramatic. Raw cotton from Vidarbha is graded and branded as "Shankar" cotton in Gujarat, commanding premium prices in international markets because of superior quality processing. The inherent quality exists within Vidarbha's crop, yet the region itself cannot capture the profit from this value addition.


What Vidarbha's cotton sells for as raw material is a fraction of what it becomes after processing and finishing elsewhere.

The government has attempted to address this gap through textile parks and industrial incentive schemes.


The PM Mitra Textile Park at Nandgaon Peth in Amravati, announced in July 2023 with an expected investment of Rs 10,000 crore and promises of creating 30,000 jobs, represents the largest recent initiative.


Infrastructure development for this park has moved slowly, with tender finalisation and initial work order issuance occurring by 2025. Negotiations with 15 textile companies, including major names such as Raymond, commenced in 2023.


Yet despite these efforts, the park has not translated into the rapid industrial transformation initially envisioned.


Agricultural Instability and Raw Material Challenges


The textile business in Vidarbha cannot be separated from the agricultural crisis affecting cotton farmers.


As production costs climbed and prices remained unpredictable, farmers increasingly abandoned cotton for alternative crops.

In the Amravati division alone, the area under cotton cultivation nearly halved between 2008 and 2013, declining from 1.5 million hectares to 815,000 hectares.


During the same period, soybean cultivation doubled from 800,000 hectares to 1.56 million hectares. In Yavatmal district, a region with historically high cotton acreage, nearly 90 per cent of farmers shifted to soybean in single season due to rising cultivation costs, poor cotton prices, and labour availability problems.


Soybeans offered clear advantages over cotton. It required less labour for harvesting, as mechanical harvesters could be rented during peak season.


Soybeans also mature within three months, allowing farmers to grow a second crop within a single agricultural year and generate income more quickly. Cotton, by contrast, remains on fields until March and provides returns only after lengthy processing delays. Maize emerged as another alternative, requiring fewer pesticide applications than cotton and offering more flexibility in harvesting timelines.


The shift away from cotton directly threatened textile raw material availability. As the area under cotton cultivation declined, the overall production quantity fell despite efforts to increase yields through technology adoption.


The introduction of genetically modified Bt cotton in 2002 promised reduced pest damage through resistance to bollworms, but this technology faced its own crisis. By the early 2010s, pink bollworm had developed resistance to Bt cotton, forcing farmers to increase insecticide applications substantially. The increased chemical use raised production costs whilst failing to improve yields, making cotton farming even less attractive.


More recent agricultural challenges compound these issues. Heavy rainfall and moisture-related problems have affected cotton quality, with excess moisture preventing farmers from selling produce at minimum support prices.


Current minimum support prices, set at Rs 8,110 per quintal for 2025, often fail to cover production costs.

Meanwhile, open market prices have remained as low as Rs 3 to Rs 5.60 per kilogram, forcing farmers into distress sales to private traders. This price instability makes planning a textile business difficult, as input costs for raw materials fluctuate unpredictably.


Power Costs and Infrastructure Constraints


Industrial operations in Vidarbha face relentless pressure from high electricity tariffs. Cotton ginning mills and processing units across the region pay between Rs 9.09 and Rs 10.31 per unit for industrial electricity consumption, with additional fixed charges reaching Rs 583 per month.


These rates substantially exceed those available in neighbouring states. Chhattisgarh, a direct competitor region, offers industrial tariffs ranging from Rs 3.90 to Rs 8.10 per unit, creating a significant cost disadvantage for Vidarbha manufacturers.

Power comprises anywhere from 10 to 20 per cent of operational costs in textile units. For units operating on thin profit margins, this expense burden directly threatens viability. The Maharashtra government introduced electricity duty exemptions for Vidarbha industries in 2024, providing some relief.


A cotton processing unit in Washim reported a 10 per cent reduction in electricity-related costs through these exemptions, enabling slightly better competition with adjacent state units. However, the exemption scope and duration remain unclear, leaving long-term planning uncertain.


Tariff increases averaging 7.5 per cent in 2024 for industrial consumers further eroded the competitive position.


Beyond electricity, establishing textile units requires significant infrastructure investments that the region cannot reliably provide.


Common Effluent Treatment Plants (CETP) are mandatory for textile operations due to environmental regulations, yet setting up independent ETPs represents a substantial capital expense.


Industrial estates theoretically provide centralised CETP facilities, but their availability and functionality remain inconsistent.

Similarly, other basic infrastructure, such as reliable water supply, adequate road networks for transporting finished products, and proper drainage systems, frequently fall short of industry standards.


These constraints force individual units to bear infrastructure development costs, significantly increasing their investment requirements and reducing profitability.


Market Dynamics and Global Competition


The textile business in Vidarbha operates within a global market increasingly dominated by cost-competitive manufacturers.


Bangladesh has become a major competitor, offering lower labour costs and favourable tariff agreements with key export markets.


Vietnam and other Southeast Asian nations similarly compete aggressively for the same markets that Indian textile exporters target. Recent tariff developments have intensified these pressures. The United States imposed 25 per cent tariffs on Indian textile and apparel exports in 2025, placing India at a severe disadvantage compared to Bangladesh (20 per cent) and Vietnam (20 per cent). Indonesia and Cambodia face even lower rates at 19 per cent.


India's textile exports to the United States, valued at approximately $5.33 billion in 2024-25, face reduced competitiveness due to this tariff differential.


With the US market representing 33 to 34 per cent of India's apparel export share, this tariff disadvantage directly impacts demand for yarn and fabric produced in Vidarbha. Indian textile manufacturers have reported declining export orders in response to the tariff shock, with spinning mills operating at only 60 to 70 per cent capacity utilisation due to a lack of demand.


Domestic market conditions have also deteriorated. China, traditionally a major importer of Indian yarns for value addition and re-export, significantly reduced yarn purchases from India in recent years. This shift accelerated yarn stock accumulation at Indian mills, reducing liquidity and forcing production cutbacks.


The absence of export demand combined with domestic oversupply has created an untenable situation for many mills.

Complicating these market challenges, the Indian government temporarily removed the 11 per cent import duty on cotton in August 2025 to support textile exporters facing global tariff pressures. This measure aimed to reduce production costs by enabling access to cheaper imported cotton.


However, this policy creates tension with domestic cotton farmers already struggling with low prices. The removal of tariff protection threatens to allow cheaper foreign cotton to flood the Indian market, potentially further depressing prices for Vidarbha's cotton producers and accelerating the shift away from cotton cultivation.


Industrial Policy Implementation Failures


Successive government textile policies have promised substantial investment and employment creation, yet actual outcomes have fallen markedly short of targets.


The 2012-2017 textile policy aimed to attract Rs 40,000 crore in investment and create 11 lakh jobs. By March 2017, actual investments reached only Rs 16,371 crore, with potential job creation of 2.50 lakh jobs.


This represented roughly 40 per cent of the investment target and 23 per cent of the employment target. The shortfall stemmed from multiple factors: inaction on the government's part, lack of investor response, poor infrastructure and connectivity in targeted regions, and delays in establishing supporting facilities.


Policy implementation has consistently lagged behind announcements. Textile parks approved under the Scheme for Integrated Textile Parks have experienced significant delays.

The Comptroller and Auditor General's 2023 audit found that at least three completed textile parks, including one in Latur, Maharashtra, were shown as functional in ministry records but had actually shut down. Five of ten sampled parks were classified as completed by the ministry without ensuring the creation of planned common infrastructure.


Three parks received grant disbursements totalling Rs 79.61 crore based solely on project management consultant recommendations, without verification of required statutory clearances, leaving the parks incomplete years after fund release.


The 2023-2028 Maharashtra Textile Policy established ambitious targets, aiming to increase cotton processing from 30 per cent to 80 per cent capacity and attract Rs 25,000 crore investment whilst creating 5 lakh jobs. Vidarbha, designated as Zone 1 in this policy framework, was given priority focus.


Yet tangible progress toward these targets remains limited as of 2025. The policy's emphasis on establishing state textile corporations and new textile parks has not yet translated into the widespread industrial activity the region requires.


Powerloom operators have also raised concerns that policy focus has shifted away from their sector, despite powerlooms providing nearly 8 lakh jobs and generating approximately 55 per cent of the state's textile revenue.


The Handloom and Weaving Sector Collapse


Beyond large industrial operations, traditional handloom weaving in Vidarbha has experienced near-total collapse.


Maharashtra registers approximately 3,354 handlooms employing about 3,509 workers statewide, with Vidarbha accounting for only a small fraction.


Villages historically renowned for handloom production have seen devastating contraction.


Dhapewada village near Nagpur, once hosting around 40 active loom households, now has only six operational looms.

Across Vidarbha, studies suggest 80 to 90 per cent declines in weaver numbers compared to earlier periods, with no significant reversal evident.


The Halba Koshti community traditionally played a central role in weaving the region's iconic Patti Kinar sarees, characterised by intricate butis created through extra weft techniques. These single-cotton yarn sarees, distinguished by their 6.5 metre length and three-inch plain border, possessed unique market appeal.


However, machine-made textiles have captured market share that handwoven products once dominated. Younger generations have abandoned weaving entirely, viewing it as economically unviable.


Traditional cooperative societies that once thrived now struggle to sustain production. Efforts to revive the sector through training and market linkage programmes have yielded limited results, as the fundamental economic calculation against weaving remains unchanged.


The Nagpur Weavers' Cooperative Spinning Mill (Sutgirni) exemplifies the human cost of industrial decline.


This spinning mill employed more than 1,124 workers before closure. The cooperative's sudden shutdown left workers in severe financial distress, as pension obligations and wage arrears accumulated for years without resolution. The cooperative's 20-acre land, located off Umred Road in Nagpur, was eventually sold to the Maharashtra Housing and Area Development Authority for Rs 177 crore.


Of the total Rs 62 crore owed to workers, only Rs 10 crore was disbursed in March 2019, leaving Rs 52 crore outstanding. Settlement of pending wages took years to resolve, with the state government finally approving Rs 50 crore from land sale proceeds in August 2025, nearly a decade after the initial shutdown. This case illustrates not only the loss of employment but also the protracted suffering of workers awaiting compensation for their lost livelihoods.


Vidarbha's textile business failure represents a convergence of structural challenges rather than a single causal factor.

Agricultural transformation has reduced raw material availability at competitive prices. Power tariffs and infrastructure deficiencies increase production costs beyond what global competition allows. Industrial policies, whilst nominally ambitious, have failed to translate into operational textile units generating meaningful employment.


Handloom traditions have collapsed under pressure from machine-made alternatives. Global tariff structures have reduced export competitiveness.


The closure of 1,246 industrial units across Vidarbha demonstrates that despite decades of policy initiatives and investment announcements, the region's textile business continues its contraction, leaving thousands of workers displaced and industrial infrastructure substantially unutilised.


References




About the Author

The NewsDirt is a trusted source for authentic, ground-level journalism, highlighting the daily struggles, public issues, history, and local stories from Vidarbha’s cities, towns, and villages. Committed to amplifying voices often ignored by mainstream media, we bring you reliable, factual, and impactful reporting from Vidarbha’s grassroots.

bottom of page