The Indian textile industry, one of the world’s oldest, rooted in the Indus Valley civilisation, is now experiencing a powerful transformation through artificial intelligence (AI) and digital automation. In 2025, this transformation is most prominently visible in textile hubs such as Tiruppur, Tamil Nadu, where the integration of AI is revolutionising the manufacturing value chain from designing and stitching to spinning and logistics.

The Tiruppur Exporters’ Association (TEA) highlights that AI adoption has increased production efficiency by 10%, contributing significantly to the region regaining its crown as India’s knitwear export powerhouse. In FY25, Tiruppur’s knitwear exports crossed ₹40,000 crore (US$ 4.61 billion) for the first time, accounting for 55% of India’s total knitwear exports. This milestone underlines how AI in the textile industry in India is reshaping its global positioning.

Across Tiruppur’s MSMEs, AI-enabled technologies like Computer-Aided Design/Computer-Aided Manufacturing (CAD-CAM) machines, precision stitching tools, and predictive maintenance systems are reducing material waste, improving design accuracy, and enhancing output. Amid labour shortages—a persistent challenge in labour-intensive sectors—automation and smart tools are allowing businesses to remain competitive and meet growing global demand.

Companies are also leveraging Software as a Service (SaaS) platforms such as Reverse Resource, which help in digitising supply chains, improving transparency, and supporting sustainability targets. These tools are allowing smaller textile businesses to track material use, forecast demand, and minimise overproduction, aligning with global retailer expectations for eco-friendly sourcing.

Another standout development in 2025 is the widespread usage of AI-based sewing machines from renowned global manufacturers like Yamato and Juki, now becoming a common sight in Tamil Nadu’s factories. These machines are designed to adjust stitching parameters in real-time, reducing human error, and improving finish quality without replacing the need for human oversight.

From micro units to mid-sized factories, AI tools such as ChatGPT and Canva are being utilised for a variety of tasks—be it generating marketing content, automating customer responses, drafting export proposals, or developing product mockups. These digital tools are empowering even the smallest players in India’s textile ecosystem to stay relevant and competitive in global markets.

Driving this transformation is international retail demand, with companies like Walmart, GAP, and Marks & Spencer seeking agile suppliers capable of meeting bulk orders with customisation, quality, and speed. To meet this challenge, Indian companies are investing in AI-powered infrastructure—a trend that is helping transform India’s textile export landscape.

Yet, the integration of AI in textiles is not being viewed as a replacement for labour. Instead, Indian industry leaders advocate a hybrid approach, wherein AI enhances existing skills and creates new employment opportunities through reskilling. As robotic sewing technologies are being trialled in countries like Japan, Indian factories are choosing to train workers to manage AI-assisted tools, thereby preserving jobs while boosting output and efficiency.

This hybrid strategy is key in a sector that employs millions, especially in rural and semi-urban India. The emphasis is on making AI an ally to labour, not a threat. Upskilling initiatives, driven by industry bodies and supported by government policies, are helping workers adapt to AI-enabled workflows—training them in machine operation, digital design, and quality control using AI dashboards.

At the macro level, AI adoption in textile MSMEs is contributing to India’s vision of becoming a global textile hub. While advanced economies move toward full automation, India’s balanced model of tech and talent could emerge as the most sustainable and inclusive path for emerging economies. With CAD-CAM integration, real-time quality analysis, AI-enabled supply chain monitoring, and design software, Indian textile units are gaining a technological edge that ensures quality, speed, and traceability.

Even policy stakeholders are recognising this shift. Incentive schemes like PLI (Production Linked Incentive) for textiles and SAMARTH (Skill Development Scheme) are being recalibrated to include tech adoption modules and digital skill training, ensuring a pipeline of AI-ready workers in the textile sector.

Looking ahead, the sustainable textile supply chain in India will increasingly depend on how well companies adopt and adapt AI tools. From forecasting demand to managing waste, from precision dyeing to logistics optimisation, AI has already shown tangible business results.

Despite a few challenges—including access to affordable tech for very small units and the need for digital literacy—the trajectory of AI integration in India’s textile industry appears irreversible. Companies, policymakers, and workers alike understand that technology must walk hand-in-hand with tradition.

To summarise, the Indian textile industry’s AI transformation in 2025 is a blend of innovation, inclusion, and ambition. Tiruppur’s export boom, MSME digital adoption, and global retailer confidence all point to a future where India leads not just in scale but also in smart, sustainable manufacturing. The industry is not just stitching clothes—it is weaving a tech-enabled future, where artificial intelligence and human skill collaborate to put India at the forefront of global textile innovation.

The Upcoming IPOs in this week and coming weeks are Pushpa Jewellers, Cedaar Textile, Adcounty Media India, Marc Loire Fashions, Indogulf Cropsciences, Moving Media Entertainment, Rama Telecom, Supertech EV, Valencia India, Neetu Yoshi, PRO FX Tech, Suntech Infra Solutions, Ace Alpha Tech, Sambhav Steel Tubes, HDB Financials.

The Current active IPO are  Abram Food, Shri Hare-Krishna Sponge Iron, Icon Facilitators, Globe Civil Projects, Ellenbarrie Indutrial Gases, Kalpataru,AJC Jewel, Aakaar Medical Technologies, Safe Enterprises Retail Fixtures, Mayasheel Ventures.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.