In the 19th century, millions of skilled Indian weavers were rendered jobless owing to the decline in the demand for Indian textiles in the world market. Trade had suffered due to the huge import duty levied on Indian textiles in England.
By the beginning of the 19th century, textiles made in England had completely replaced Indian textiles in their own traditional markets.
Though the weavers and spinners lost their jobs, coming up of cotton mills in many Indian cities helped many handloom weavers get employment.
Several Indian towns like Sholapur and Madura became the new important centres of weaving. The first cotton mill came up at Bombay in 1854. The port at Bombay had been exporting cotton to China from the early nineteenth century. Therefore, Bombay made an ideal location for a cotton mill. Thousands of poor artisans, weavers, agricultural labourers and peasants began to migrate to cities with cotton mills in search of work.
During the national movement, Gandhiji urged Indians to discard imported clothes and use khadi that was spun by a charkha and was woven by hands.
The Indian textile industry did not do well initially as it faced stiff competition from cheap textiles from Britain and received no support from the colonial British government. It was the First World War that signaled the initial development of Indian cotton factories.