A US Department of Agriculture's Economic Research Service report said that there will be increased foreign investment in Indian cotton and textile industries that could propel the nation as a major global clothing supplier. The report noted that while China has remained a preferred supplier so far, global firms are also becoming increasingly interested in India to “reduce risk through diversification and because of the growing perception of India as a competitive clothing supplier with domestic sources of fabric.”

Several retail multi-national giants including generics as Wal-Mart, JC Penney, Gap, and branded apparel marketers such as Calvin Klein, Lacoste, and Sara Lee have been attracted to India because of its potential to provide one-stop shopping. While Wal-Mart plans to buy goods worth USD 7-10 billion over the next 2 years, JC Penny plans to buy USD 2 billion worth of products annually.

Unlike other industries such as auto, computer, and aircraft industries that are driven by producer-oriented supply chains where raw material suppliers, distributors, and retailers are vastly controlled by the manufacturer, the clothing industry is controlled by the buyer. In this scenario, large generic and branded retailers dominate a global supply chain through decentralized production networks linked to developing nations that require coordination for a range of activities from design, production, to marketing.

Recently, the abolition of the Multi-fiber Arrangement quota regime has led to an intensified interest for worldwide sourcing and India is slowly emerging to assume its historic role as the preeminent producer of textiles.