India’s textile and apparel industry has begun its AI, digitalisation and automation journey, with enterprises increasingly exploring and adopting new technologies. However, the industry’s overall readiness for artificial intelligence (AI) remains a work in progress, according to a new study by the Confederation of Indian Textile Industry (CITI), supported by the Northern India Textile Research Association (NITRA).
The study, “AI, Automation & Digitalisation Readiness in the Indian Textile & Apparel Industry,” was released by Uttar Pradesh Chief Minister Shri Yogi Adityanath at UP TEX 2026 in Lucknow on September 8.
The study covered the wider textile value chain, from spinning through garmenting, and included home/technical textiles and allied services. Respondents represented enterprises across a range of turnover categories, with strong participation from small and mid-sized businesses. Approximately 70% of respondents cater to export markets, with export dependence ranging from firms with no exports to those deriving more than 75% of their business from exports.
Explaining the rationale behind the study, CITI Chairman Shri Ashwin Chandran said: “AI, automation and digitalisation are no longer technologies relevant only to large or highly sophisticated enterprises; they are becoming important enablers of productivity, quality, resilience and competitiveness across the textile value chain. The findings show that the industry has begun this journey, but there is a significant scope to strengthen the digital foundations, skills and capabilities needed to realise the full benefits of these technologies.”
The survey highlights both progress and significant gaps in digital adoption:
- 35% of firms have not yet started adopting AI.
- 38% operate without a digital system, while around 14% report fully integrated digital systems.
- Automation is concentrated mainly in routine applications such as machine monitoring and setting, with functions such as production scheduling seeing lower adoption.
The findings indicate that while technology adoption is underway, it remains uneven across the industry. High investment costs and shortages of skilled talent emerge as the leading barriers to wider technology adoption. The study also finds that technology is having a mixed impact on employment, while training remains largely informal and enterprise-led.
Globally, India is positioned in the “early-to-emerging” stage of AI and digital adoption in textiles and apparel. India continues to trail China, underlining the need to accelerate technology adoption and strengthen digital capabilities to enhance global competitiveness.
The study highlights a clear requirement for practical, financial and institutional support to help enterprises, particularly MSMEs, progress along the technology adoption curve. Demonstration factories, capital subsidies and common digital platforms emerge as the most important areas of support, followed by industry-specific AI tools, Centres of Excellence, training programmes, pilot projects and financing mechanisms. Such interventions can reduce investment risks, enable enterprises to test technologies before adoption and improve access to digital capabilities.
Overall, the study finds that AI, automation and digitalisation can become powerful enablers of the next phase of India’s textile and apparel competitiveness. The immediate priority is to strengthen the digital foundations, skills and ecosystem required for wider adoption, while creating pathways for enterprises, especially MSMEs, to move from individual technology applications towards connected and increasingly intelligent operations.
The study concludes that a coordinated effort involving Government, industry, technology providers, research institutions and training organisations will be essential to support this transition and strengthen India’s position as a globally competitive textile and apparel manufacturing hub.
