Cellulose Fibre and Sustainable Textiles 2025

State of Textiles / LB Tex Interview

Aatmanirbhar Bharat Will Come When We Rely More on India-Made Products

From a 90-day credit norm to 250 and counting, India’s textile market has turned into a waiting game. One jolt followed another — demonetisation, GST, lockdowns, wild cotton swings. Through it all, Gujarat’s textile heartland endures, with traders and manufacturers like Gaurang Bhagat and his LB Tex battling to keep India’s fabric trade from tearing apart.

Richa Bansal

31 October 2025

7 minutes

Long Story, Cut Short

Textile credit chains stretch thin as payments delay and defaults rise.
Fraud, dumping, and cash-based trade drain confidence and capital.
Yet Gujarat’s fabric industry holds steady, blending policy, innovation, and endurance.

Earlier, a lot of fabric and garments used to come by road from Bangladesh and China. The government managed to stop that, but the same material now comes by sea—to Chennai or Mumbai, it makes no difference. That’s why today the entire Indian textile market is disturbed.

higher duties Earlier, a lot of fabric and garments used to come by road from Bangladesh and China. The government managed to stop that, but the same material now comes by sea—to Chennai or Mumbai, it makes no difference. That’s why today the entire Indian textile market is disturbed.
Richa Bansal / texfash

NOTE: This is the concluding installment of a two-part interview. The first appeared here yesterday.

Richa Bansal: What is the current situation when it comes to the textile industry in Ahmedabad and across Gujarat. What are the problems the industry is facing right now?
Gaurang Bhagat: Since around 2016, the textile market has increasingly become a credit-based business. What used to be payments within 90 days has now stretched to 200–250 days. The entire fabric trade runs on credit.

First came demonetisation. During that time, many dishonest traders disappeared without paying their dues. Then GST arrived in 2017, and many more stopped working or simply didn’t clear payments. Later came the lockdown—several traders passed away, others vanished, and a large number of payments were never made. So one blow came after another.

Then speculation entered the cotton trade. Prices fluctuated wildly—cotton that cost around ₹45,000 a candy rose to over ₹101,0000 (one lakh ten thousand), and later fell again to about ₹57,000. These huge swings ruined many traders. The business suffered because when prices double or collapse, it becomes impossible to plan or sustain operations.

Traders also began chasing quick returns elsewhere. Money started moving into the stock market and real estate. Capital that should have stayed within the textile market leaked out, leaving the industry short of liquidity. When there is no cash in the system, the market cannot move; no one can afford to sell on credit. This has been a fundamental problem.

Textiles have always been sold largely on credit. Even in remote villages, cloth is supplied on credit and payment comes only after the harvest. That cycle continues, but it now stretches longer than ever.

Surat and Ahmedabad are the two biggest textile hubs. Surat in particular has expanded rapidly—it even started dealing in cotton about two years ago, roughly 5% of its trade now. Surat’s growth has been phenomenal. Ladies’ materials, saris—products from this port city are sold across the world, even to international brands like Zara. Garments are exported too. But Surat faces the same fundamental issue: defaults and fraud. Traders take goods on credit, don’t pay, and simply move on to another city—Bangalore, Mumbai, Ahmedabad. Entire gangs have been operating like this for years.

Filing police complaints rarely helps. Once a case is registered, the accused move to another state and local police there don’t cooperate. For instance, a complaint filed in Gujarat means police might have to pursue the case in Rajasthan or West Bengal, but local authorities there won’t always help. So fraud keeps increasing and liquidity keeps drying up.

Despite these challenges, both the Central and Gujarat governments deserve credit. Gujarat’s 2012 textile policy brought in major investment: the number of spindles rose to around 45 lakh, and many new weaving looms were installed. The industry today stands largely because of those policy supports.

The old central schemes have ended, but new ones have come in—the PM Mitra Parks, for example. They will take time to become operational, but larger players will eventually shift to them. Of course, international wars and trade tensions affect markets too. But India’s domestic market is strong and large, and that has kept the textile industry afloat.

We have survived because of domestic demand. Even Prime Minister Narendra Modi is emphasising self-reliance. True Aatmanirbhar Bharat will come only when we rely more on Indian-made products. But one big challenge now is dumping by China.

China is dumping fabric at throwaway prices through under-invoicing. For instance, a product worth ₹200 is declared at ₹50. The importer then sells it here for ₹225 and books an artificial profit. They even buy fake invoices from fraudulent dealers so that they can hide real transactions. These practices make enforcement almost impossible. The government must act by imposing higher duties or other deterrents on such imports.

Earlier, a lot of fabric and garments used to come by road from Bangladesh and China. The government managed to stop that, but the same material now comes by sea—to Chennai or Mumbai, it makes no difference. That’s why today the entire Indian textile market is disturbed.

TAGS

Company:

LB Tex

Country:

India

Individual:

Gaurang Bhagat

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Subject:

Richa Bansal: Obviously, this is not limited to just Gujarat?
Gaurang Bhagat: Yes, the problem is all over India. Take Delhi or Kolkata—two big trading centres. Many businesses there don’t pay GST. They buy bills to show on paper but sell only in cash. They even sell those bills to others later. Mumbai and Delhi are notorious for this. Nearly 99% of trade in some markets happens in cash.

This is the biggest sickness in our industry. When a seller doesn’t upload bills on the GST portal, genuine traders like us suffer. These cash-based traders also delay payments—they route money through fake shops or post-dated cheques, and by the time the cheque is deposited, that shop has vanished or been raided.

I’ve been in the fabric market for over 50 years. I’ve served as president of the 120-year-old Maskati Kapad Market Mahajan for 12 years and am currently treasurer of the Gujarat Chamber of Commerce. From my experience, textile trading has become an extremely difficult job.

Online platforms like Amazon have added to the pressure. Garments are being sold online at wholesale prices. When customers get cheaper deals online, local shopkeepers cannot compete. Many small retailers will be wiped out sooner or later. This is not just a textile problem—it’s happening in every business.

Richa Bansal: Earlier you mentioned the idea of installing sewing machines in villages. Tell me more about that and about the ‘Garib Melas’ you referred to.
Gaurang Bhagat: Yes. When Narendra Modi was chief minister, the Gujarat government organised large-scale “Garib Melas”—welfare fairs for economically weaker sections. These melas were remarkable. I’ve seen them personally. There were more than 500 items distributed free to help people start earning livelihoods—everything from kitchen kits for women, to dairy kits for milkmen, carpentry tools for carpenters, even sewing machines imported from China. They also distributed bicycles to children, especially girls, so they could travel to school.

The concept was brilliant: give people the tools to work. For example, a plumber receiving a toolkit could start earning ₹100–₹200 per day immediately. Such initiatives should never stop, and nor relegated as a one-time event. Providing equipment to the poor helps them generate income and boosts demand for industrial goods.

They build self-reliance from the ground up. If every poor family gets the means to work, not just money, they’ll stand on their own feet.

Richa Bansal: Do these welfare fairs still happen?
Gaurang Bhagat: I’m not sure if they’re as frequent now. They certainly used to be during his tenure as chief minister. Maybe something similar exists under new schemes from the Central government, but I don’t have recent details.

Gaurang Bhagat

Founder

LB Tex

Surat and Ahmedabad are the two biggest textile hubs. Surat in particular has expanded rapidly—it even started dealing in cotton about two years ago, roughly 5% of its trade now. Surat’s growth has been phenomenal. Ladies’ materials, saris—products from this port city are sold across the world, even to international brands like Zara. Garments are exported too. But Surat faces the same fundamental issue: defaults and fraud. Traders take goods on credit, don’t pay, and simply move on to another city—Bangalore, Mumbai, Ahmedabad. Entire gangs have been operating like this for years.

The LB Tex Story

Located near Bavla, about 40 km from Ahmedabad, LB Tex is a fully integrated textile unit set up in 2016–17 as it took advantage of the available tax-benefit schemes, beginning with 300 looms, later adding open-end spinning using both cotton and blends. Then came processing facilities—printing and dyeing. The integrated unit thus offers spinning, weaving, and processing (including printing and dyeing)—all under one roof and "one PAN card."

The production capacity is around 5 million metres per month.

The company also runs two dedicated denim lines. The denim is exported to 11 countries. Earlier it shipped to the United States, the products reaching retail chains like Ross—and to Egypt as well, and now to other destinations in Asia, the Middle East, and Africa. At present, LB Tex is not booking US orders, but the fabric continues to sell in other markets.

It has invested heavily in compliance and quality control. Its in-house testing laboratory is top-notch—fully equipped for colourfastness, tensile strength, shrinkage, and every other parameter global brands require, generating all necessary test reports internally.

The current turnover is roughly ₹400 crore.

Alongside this, LB Tex also does substantial business in government supplies—defence fabrics, school uniforms, and other institutional orders—through partnerships. Together with these, the combined business volume touches about ₹1,000–1,200 crore.

Richa Bansal: Let’s talk about your company LB Tex. You supply fabric for defence and uniforms. What volumes are involved? And what do you think of the government’s procurement system?
Gaurang Bhagat: We only supply fabric, not stitched garments. Across different states—Tamil Nadu, Karnataka, Andhra Pradesh, West Bengal, Jharkhand, Rajasthan—we supply two to three crore metres annually. Defence alone accounts for about 50 lakh metres.

My firm belief is that all government procurement should be strictly Make in India. Whether it’s defence, navy, hospitals, or school uniforms—everything should be sourced domestically, with Indian-made material. At present, too many state-level orders are converted into cash transfers.

The current policy of cash transfers to beneficiaries is actually hurting the industry. Earlier, the Gujarat government used to supply school uniforms directly. Now, instead of giving uniforms, they transfer about ₹700 per child in cash for two sets of clothes. When that happens, there’s no guaranteed demand for fabric.

A better model would be for the government to purchase the cloth itself and set up sewing centres in every village, preferably run by women’s self-help groups. That way, women earn livelihoods, the garments fit locally, and the textile industry gets steady orders.

Richa Bansal: Cash transfers? You mean instead of giving uniforms, they just give money to beneficiaries?
Gaurang Bhagat: Exactly. Earlier, the government of Gujarat used to distribute uniforms directly. Now it simply deposits ₹700 per child for two sets of clothes into parents’ accounts. That kills the domestic demand for cloth.

The better approach is for the government to purchase fabric in bulk and have it stitched locally. Every large village should have a sewing centre, preferably run by women’s self-help groups. It serves two purposes: it creates employment for women and ensures proper-fitting uniforms for students.

If the government wants to promote rural employment and support industry simultaneously, this is the perfect model.

Richa Bansal: Does the same system apply to defence supplies too?
Gaurang Bhagat: Defence procurement still happens through official channels. The fabric is locally produced and supplied; there’s no issue there. The cash-transfer system is more common with state-level welfare schemes like school uniforms.

Richa Bansal: Does India make all the fabric for defence uniforms, or is some still imported? What’s the typical composition of the fabrics you supply for defence?
Gaurang Bhagat: It’s all made in India now. Gujarat contributes a big share, though I don’t have exact numbers. Defence uniforms typically use about 80% cotton and 20% polyester. Police uniforms have slightly less cotton to reduce heat retention. The fibres are blended—spun together into yarn—and then woven into fabric. That way, the strength and comfort balance is maintained.

Richa Bansal: And for school uniforms, how is the fabric designed?
Gaurang Bhagat: For children, the focus is on light-weight and easy-drying fabrics. The fabric’s reed-pick—the density of warp and weft—is kept low so it’s soft and breathable. Something like “spun-by-spun” quality—neither too coarse nor too heavy—works best. That makes it comfortable for students and easy to maintain.

Richa Bansal

RICHA BANSAL has more than 30 years of media industry experience, of which the last 20 years have been with leading fashion magazines in both B2B and B2C domains. Her areas of interest are traditional textiles and fabrics, retail operations, case studies, branding stories, and interview-driven features.

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