Textile boosts Indian economy but with difficult challenges, like high production costs, in-friendly labour law, logistic disadvantages, rising transaction cost, declining in mill sector, globalization etc., The textile industry has been badly affected by the global recession. To overcome this situation Indian government is turning its attention to removing the bottlenecks that hinder its growth and has taken some important relief measures & favourable policy initiatives. After economic slowdown Indian economy is returning back on its path of progress. Thus much of India’s economic growth will rise and poverty will be reduced. The good sign, however, is the positive indications of increase in consumer confidence & demand in the developed economies.