The Ministry of Textiles is responsible for policy formulation, regulation, development and export promotion in respect of the textile sector including cotton, wool, silk, jute and other fibres and handicrafts. However, it does not deal with non-cellulosic synthetic fibres and filament yarns such as nylon, polyester, acrylic and poly-propylene.

The developmental activities of the Ministry are oriented towards making adequate quantities of raw material available to all sectors of the textile industry and augmenting the production of fabrics at reasonable prices from the organised and decentralised sectors of the industry. Towards this objective, the Ministry lays down guidelines for a planned and harmonious growth of various sectors of the industry. Special emphasis is given to the development of handloom sector in view of its large employment potential. The Ministry monitors the techno-economic status of the industry and provides the requisite policy framework for modernisation and rehabilitation. The Ministry coordinates the activities of Textiles Research Associations and lends financial support to them for undertaking research and development.

Modernisation of the textile industry has been identified as the major requirement for its global competitiveness. The Technology Upgradation Fund Scheme (TUFS) launched by the Government in April, 1999 for a period of 5 years has been improved and simplified to enable the industry to access capital for technological upgradation. The Scheme provides reimbursement of 5 percentage point on the interest charged by lending agencies to make capital available to the textile and jute mills at internationally comparative rates of interest. Exchange rate erosion up to 5 per cent per annum in respect of foreign currency loans has also been covered by the scheme. With funds from the scheme being placed with nodal agencies now on a quarterly basis, the pace of the scheme gained impetus. So far (July 2000) 662 firms have applied for loans amounting to Rs.9,769.13 crore. Of them, 461 cases have been sanctioned and a steady flow of funds established. The nodal agencies have co-opted as many as 208 financial institutions/banks so far with them into the scheme.

The Technology Mission in Jute is under preparation to improve the upstream process and issues of productivity. The mission, to be announced shortly, will aim to achieve:

Development of high yielding seeds
Improving of retting practice to get higher quality fibre
Transfer of cost effective technology to growers.
Creation of strong marketing linkages
Extend the scope to diversify jute products.
India-Australia Joint Business Group

In order to increase bilateral trade in industrial fibres and textiles between the two countries, facilitate investment in Indian industry; provide mutual transfer of technology and training and environmentally sound development practices; and give thrust to exports, a Joint Business Group was set up with membership from representatives of wool and woolen industry.

The Prime Minister launched the Technology Mission on Cotton, a Rs.600 crore scheme, on February 21, 2000, to address the issues of low productivity, contamination, obsolete ginning and pressing factories, lack of storage facilities and lack of proper marketing facilities. The Mission has four Mini Missions (MM) with specific objectives of:
MM I - research;
MM II - dissemination of Technology to Farmers;
MM III - improvement in Marketing Infrastructure; and
MM IV - modernisation of ginning and Pressing Factories.

While the first two Mini Missions are being implemented by the Ministry of Agriculture, Ministry of Textiles is implementing MM III & IV. Already as on August 31, 2000, proposals under MM-III and IV amounting to Rs.113 crore, (of which Government of India share is Rs.36.71 crore) have been sanctioned for activating market yards and for modernizing ginning and pressing factories.