Woollen textile in India has come to a prodigious position after the economic liberalization in India in the 1990. There are more than 50 woollen mills in the country. Many of them are based in Punjab with Amritsar and Ludhiana serving as the key centres. The other centres of the industry include Mumbai, Bengaluru, Jamnagar, Kanpur and Srinagar. Indian woollen textile has been developed in Punjab, Uttar Pradesh, Maharashtra, Rajasthan, Haryana, Jammu and Kashmir, Gujarat, Uttaranchal, Andhra Pradesh and Karnataka. The Indian woollen textile is well admired for the hand-knitted carpets and apart from these, it is also used for making blankets, knitwear, garments, apparel, finished textiles etc.

The Government of India has taken necessary steps for the development of woolen textiles in India. Marketing of wool and woollens, market intelligence, standardization, price stabilization of wool and woolen products and quality control have been made by the textile ministry of India. India mostly manufactures coarse wool that finds extensive use in the production of quality carpets and blankets. Fine quality wool required for weaving, knitting and hosiery yarn is produced in small proportion in Himachal Pradesh as well as in Jammu and Kashmir. First woollen mill in the country was founded in the year 1876 at Kanpur.

In India, quality wool is imported basically to meet the requirements of the woollen industry in India. This particular industry manufactures woollen fabrics, knitting wool and hosiery yarn. However, due to some foreign exchange difficulties, import of wool is restricted and imported wool often falls short of the actual requirement of the industry. Thus, only a few portion of the installed capacity of the industry is being utilized. Further, the production of the worsted yarn that is used in the production of woollen fabrics, hosiery goods and knitting wool fluctuates considerably from year to year.

Sheep breeding farms are being established in parts of north western India for improving upon the quality and for augmenting the quantity of wool. Positively, the manufacture of carpet yarn has made a significant progress over the paste few decades as it is entirely based on indigenous wool. Indian hand made shawls and rugs are well known throughout the world for their rich design and texture. Besides, shawls and rugs, India manufactures diverse variety of exquisite woollen fabrics, pullovers, cardigans and blankets.

Handlooms produce a huge variety of woollen goods like shawls, coatings, carpets, blankets, etc. They are almost made by every family in hilly regions of the country. Modern woollen textile mill industry is mainly concentrated only to a few cities of India. This country produces quality woollen fabrics that are popular across the globe.