Pakistan's textile industry, which makes up 60% of the country's total exports, has been adversely affected by a drop in cotton production. Reasons for the decline include floods, a power crisis, and poor government policies.

The decline in textile Pakistan's textile exports has opened more opportunities for India, with the Indian government pushing for more textile exports.

The Indian textile sector has several advantages, including projected growth in cotton production, skilled manpower and low cost of production. India's textile and apparel exports have also increased significantly in the past year. The government is supporting the sector through initiatives such as 100% FDI, a Production-linked Incentive (PLI) Scheme, and uniform goods and services tax rates. The release of funds through schemes like Integrated Textile Parks and the Technology Upgradation Fund Scheme has also encouraged private equity and employment opportunities in the sector. Additionally, the government aims to establish 75 textile hubs in the country.

As one of the largest cotton producers in the world, India competes directly with other major textile producing countries such as Pakistan, Bangladesh, and Vietnam.