Textile Mill Profitability Calculator
Calculate your potential monthly profits for a small textile mill in India. Enter your specific production parameters to see how different factors affect profitability.
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Profit Summary
-Running a textile mill in India isn’t just about spinning yarn or weaving fabric-it’s about surviving a market that’s changing faster than ever. If you’re asking whether it’s profitable, the answer isn’t yes or no. It’s maybe, depending on how you run it, where you’re located, and what you’re making. Thousands of mills have shut down since 2015. But others are making more money now than they did ten years ago. The difference? Strategy.
What’s Actually Going On in India’s Textile Industry?
India is the second-largest producer of cotton in the world. It’s also one of the top exporters of finished textiles, shipping over $40 billion worth of fabrics, garments, and home textiles in 2024. But behind those numbers, the industry is split in two. On one side, you’ve got big players in Tamil Nadu and Gujarat with automated looms, export contracts, and direct access to global buyers. On the other, you’ve got hundreds of small mills-often family-run-using 20-year-old machines, struggling to pay for electricity, and selling to local traders at rock-bottom prices.
The real story isn’t about whether textiles are profitable. It’s about who gets to profit. The mills that survive are the ones that stopped being just manufacturers and became supply chain partners.
How Much Does It Cost to Start a Small Textile Mill?
Let’s say you want to open a small mill with 500 spindles and 20 power looms. That’s enough to produce about 10,000 meters of fabric per day. The upfront cost? Between ₹1.2 crore and ₹2 crore (roughly $14,500-$24,000 USD). That includes:
- Used spinning machines: ₹40-60 lakh
- Second-hand power looms: ₹30-50 lakh
- Electricity upgrades and diesel generator: ₹15-20 lakh
- Factory rent and setup (6 months): ₹10-15 lakh
- Raw cotton inventory (3 months): ₹20-30 lakh
- Licensing, labor setup, safety compliance: ₹5-8 lakh
That’s not counting working capital. You’ll need another ₹50-70 lakh just to keep running for the first six months before you get paid by buyers. Most new owners underestimate this. They think buying machines is the big expense. It’s not. It’s cash flow.
What’s the Monthly Operating Cost?
Once you’re open, here’s what eats your money every month:
- Raw cotton: ₹8-12 lakh (price swings between ₹60-90 per kg)
- Electricity: ₹1.5-2.5 lakh (textile mills use 2-4 times more power than a small factory)
- Wages: ₹1.2-1.8 lakh (for 25-35 workers, including weavers, supervisors, helpers)
- Maintenance: ₹50,000-1 lakh (broken looms don’t fix themselves)
- Transport and logistics: ₹40,000-70,000 (to send fabric to warehouses or exporters)
- Interest on loans: ₹50,000-1.2 lakh (if you borrowed 70% of your startup cost)
That’s ₹4-6 lakh per month in fixed costs. You need to sell at least ₹6-8 lakh worth of fabric just to break even. And that’s before taxes.
How Much Can You Actually Earn?
Let’s say you make plain cotton plain weave fabric. The market price in late 2024 was ₹65-80 per meter. Your mill produces 10,000 meters a day-that’s 3 lakh meters a month. At ₹70/meter, that’s ₹2.1 crore in revenue.
But here’s the catch: you don’t get to keep it all. Your cost to produce each meter? Around ₹50-58. That’s a gross margin of ₹12-20 per meter. Multiply that by 3 lakh meters: ₹36-60 lakh in gross profit per month.
Subtract your ₹4-6 lakh monthly expenses, and you’re looking at ₹30-54 lakh in net profit before taxes. That’s a 15-25% net margin. Sounds good? It is-if you’re consistent.
But here’s what kills most mills: inconsistency. One month, cotton prices spike. The next, your buyer delays payment for 90 days. Then a power outage shuts you down for three days. One bad month can wipe out two months of profit.
Where the Real Profit Is: Beyond Just Fabric
The mills making real money aren’t just selling cloth. They’re selling reliability. They’re offering:
- Small batch orders (500-1,000 meters) for boutique brands
- Fast turnaround (7-10 days instead of 30)
- Quality control with lab testing
- Export documentation handled for them
One mill in Tiruppur started doing this in 2022. Instead of selling to middlemen for ₹60/meter, they now sell directly to European eco-fashion brands for ₹110-130/meter. They charge extra for organic cotton certification, traceable supply chains, and carbon-neutral shipping. Their profit per meter? Over ₹65. They went from 12 employees to 68 in three years.
Profit isn’t in the loom. It’s in the relationship.
The Big Risks No One Talks About
Here are the hidden traps:
- Cotton price volatility: A bad monsoon can push cotton prices up 30% in weeks. You can’t just raise your prices overnight-buyers will walk.
- Power cuts: Even in industrial zones, 3-5 hours of power cuts per day are common. Diesel generators cost ₹12-15 per liter. That’s ₹20,000-₹30,000 extra per day.
- Competition from China: Chinese mills sell the same fabric at 15-20% lower prices because they get government subsidies and bulk cotton imports.
- Labour shortages: Young people don’t want to work in mills. You’ll pay more to keep experienced weavers-or lose quality.
- Delayed payments: Exporters and domestic buyers often delay payments by 45-90 days. If you’re borrowing money, interest piles up fast.
One mill owner in Ludhiana told me he lost ₹80 lakh in 2023 because a buyer went bankrupt after receiving a ₹1.2 crore shipment. He never recovered the money.
Who Should NOT Start a Textile Mill?
If any of these describe you, walk away:
- You think you can run it alone.
- You don’t have 6-12 months of personal savings to cover losses.
- You’re betting on government subsidies to save you.
- You don’t know your buyers before you buy your machines.
- You’re in love with the idea of being a ‘textile entrepreneur’ but hate dealing with logistics, quality control, or accounting.
Textile manufacturing isn’t a side hustle. It’s a full-time, high-stakes operation. You need to be part engineer, part salesman, part accountant, and part crisis manager.
Who Has the Best Chance of Success?
These three types are thriving:
- Export-focused small mills: Those who bypass middlemen and sell directly to EU, US, or UAE buyers. They use platforms like Alibaba and attend trade fairs in Mumbai or Surat.
- Specialty fabric producers: Mills making organic cotton, linen blends, or technical textiles for medical or automotive use. These have higher margins and less competition.
- Location-savvy operators: Those in Tamil Nadu, Gujarat, or Maharashtra with access to ports, skilled labor, and reliable power. A mill in Odisha or Bihar will struggle to compete.
One mill in Coimbatore started with just 10 looms. Now they make flame-retardant fabric for Indian railways. Their contract? ₹4.5 crore per year. No marketing. Just one good product and perfect delivery.
Government Schemes That Actually Help
Yes, the government offers support-but only if you know where to look:
- PM-MITRA Parks: 7 industrial parks across India with ready-to-use infrastructure. Rent is subsidized. Power and water are guaranteed.
- Technology Upgradation Fund Scheme (TUFS): Up to 15% subsidy on new machinery. You need to apply before purchase.
- Export Promotion Council for Handlooms & Textiles (EPCH): Free training, buyer meetings, and participation in international fairs.
- MSME loans at 4% interest: Available through SIDBI if your mill is registered under MSME.
Don’t expect handouts. These aren’t free money. They’re tools for those who already have a plan.
Final Verdict: Is It Profitable?
Yes-but only if you treat it like a business, not a dream.
Textile mills in India can make solid profits. But they’re not easy. They’re not fast. And they’re not for everyone. The ones making money are the ones who stopped thinking about machines and started thinking about customers.
If you have a clear buyer lined up, access to reliable power, a team that knows how to fix a loom at 2 a.m., and the patience to wait 6-8 months for cash flow to stabilize-then yes, it’s profitable.
If you’re hoping to get rich quick by buying a few machines and hoping for the best? You’ll be another statistic.
Frequently Asked Questions
How much profit can a small textile mill make in India per month?
A small textile mill producing 10,000 meters of fabric daily can make a net profit of ₹30-54 lakh per month after all costs, assuming stable cotton prices and consistent sales. That’s a 15-25% net margin. But this requires reliable power, timely payments, and no major breakdowns. Many mills make far less-or lose money-due to delays, price swings, or poor quality control.
Is it better to start a textile mill or buy a ready-made garment unit?
It depends on your capital and market access. A garment unit needs less upfront investment (₹50-80 lakh) and faster returns because you’re selling finished products. But margins are thinner (8-12%) due to fierce competition. A textile mill has higher startup costs but can earn 15-25% margins if you produce specialty fabrics or export directly. If you have buyers lined up, start with the mill. If you need quick cash flow, start with garments.
What’s the biggest mistake new textile mill owners make?
They buy machines before securing buyers. Many spend ₹1.5 crore on equipment, then spend the next year chasing orders. By then, their cash is gone, interest is mounting, and they’re forced to sell at a loss. The right order: First, sign 3-4 buyer agreements. Then buy machines. Always.
Can a textile mill survive without exporting?
Yes-but it’s harder. The domestic market is saturated with low-cost, low-quality fabric. Export buyers pay 20-40% more for consistent quality and certifications. Mills that only sell locally often compete on price, which leads to thin margins and constant cash flow problems. Exporting isn’t mandatory, but it’s the most reliable path to real profitability.
How long does it take for a textile mill to become profitable?
Most mills take 6 to 12 months to break even. The first 3 months are usually losses-setting up, testing machines, finding buyers. Months 4-6 are about stabilizing production and getting first payments. By month 8-12, if everything runs smoothly, you’ll see consistent profit. Rushing this timeline kills more mills than bad machines.
Are government subsidies worth relying on?
No. Subsidies like TUFS or PM-MITRA help reduce costs, but they’re not guaranteed. Applications take 4-8 months to process. You can’t wait for them to start operations. Use them as a bonus, not a foundation. Your business plan should work even without any subsidy.
What’s the future of textile manufacturing in India?
The future belongs to small, agile mills that make specialty fabrics-organic cotton, technical textiles, recycled blends-and sell directly to global brands. Big, outdated mills with no digital systems or quality control are disappearing. The ones that survive will be lean, tech-savvy, and customer-focused-not just machine operators.
Next Steps If You’re Serious
If you’re still considering this, here’s what to do next:
- Visit 3 textile clusters-Tiruppur, Surat, and Ludhiana. Talk to owners, not salespeople.
- Get 3 buyer quotes in writing before you buy a single machine.
- Calculate your break-even point using real numbers, not estimates.
- Apply for MSME registration and check eligibility for TUFS subsidy.
- Set aside 12 months of personal savings to cover losses.
Textile manufacturing in India isn’t dying. It’s being rebuilt. The winners aren’t the biggest. They’re the most thoughtful.
