Since the 1990s, the business environment in India has changed. The economy is exposed to a greater degree of external competition, more liberal trade and investment policies, and improvement in the balance of payments and foreign exchange positions. The liberalization has stimulated a wave of modernization and development within the country's clothing industry too.

The textile and garment industry currently accounts for about 20% of India's total exports. India is a major sourcing hub for ready-made garments for global companies like Gap, Appalachian Mountain Club, JC Penny and Tommy Hilfiger. The major local players are Alok Industries, Arvind Mills, the Nahar Group, the Vardhaman Group, Bombay Dyeing, Raymonds and Gokaldas Exports.

The apparel sector is expected to expand even further following the expiration of the global textile and apparel quota system in December 2004. India expects to capitalize on its strong multi-fibre base, large production of cotton, low-cost manpower, and presence across the entire value chain of the textile and apparel industry.

It also has a focus on value-added products. The challenge is to consolidate the industry, which will result in economies of scale and resources becoming available for capital investment with which to upgrade plants and machinery.

Tirupur is an Important Trade Center of India which is famous for knitted garment wears. It is famous for the export of all Knitted garment wears such as T-Shirts , Polo-Shirts,Sweat Shirts,Banians,Pyjamas, and Night Dresses on various Fabrics like Single Jersey, Interlock, Fleece, Polar Fleece, Pique Jersey, Pointelle Jersey,RIB,Pointelle RIB,Drop Needle etc.

Tirupur accounts for 90% India's cotton knitwear export , worth an estimated Rs.5,000 crores. Tiruppur has gained universal recognition as the leading source of Hosiery, Knitted Garments, Casual Wear and Sportswear. The city accounts for 90 % of India's cotton knitwear export, worth an estimated US$ 1 bn

The dramatic transformation of Tirupur from domestic market to international market is mainly attributed to the fact that most of western countries started disbanding their garments manufacturing due to pollution and high cost of labour. Concurrently, the Asian Tigers Japan, Hong Kong, Taiwan and South Korea started moving to hi-tech areas thus enabling Tirupur to capitalize the opportunity of penetrating into the European Market.

Besides, knitwear units catering for exports and local markets, there is a large number of other ancillary any supporting industrial units operating for manufacture of elastic tapes, cartons, printing of labels, polythene bags and other packing materials.