India's textile industry has managed to bounce back even though the pandemic is not over yet. The factories of Texport Industries in southern central India are filled with thousands of female workers. They were busy turning yarn and fabric into T-shirts, shirts, spaghetti tops, and children's clothing for US customers Tommy Hilfiger and Kohl's Corp. Having been beaten in recent years by neighboring Bangladesh and later hit by the Covid-19 pandemic, India's garment factories are now nearing full capacity. It is a rare labor market bright spot for Prime Minister Narendra Modi and his ruling party as they head for elections in 2024.

"We are very busy. We are constantly looking for more workers to work in this factory," said Parashuram, head of one of Texport's factories in the country, as the 60 newly recruited women practiced sewing.

Texport is seeking land to add a new plant around its main production base in Hindupur, about 100km north of the technology hub Bengaluru. Continued success for the textile and apparel industry, the country's biggest employer after agriculture, is crucial if Modi is to successfully tame protracted unemployment.

India's unemployment rate is above 7% and is estimated to have surpassed the global average in five of the last six years. This has become a huge problem for a country that has to create millions of jobs every year just to keep up with young people joining the labor market.

India is the world's fifth largest exporter of textiles and apparel with a 4% share of the US$840 billion global market. While China controls more than a third.

India's exports are on par with its closest rival Bangladesh about a decade ago but have lagged in recent years especially in clothing. This is due to higher labor costs which make Indian clothing about 20% more expensive.

Indian textile and apparel companies say they are now adding new clients. Along with selling more to existing clients and increasing production capacity as foreign buyers seek to diversify their supply chains.

Apart from China, only India has a large supply chain for everything from cotton to garments.

However, some industry leaders say that unless India signs free trade agreements with Western countries. Because it won't be easy to sell more from Bangladesh, which also enjoys preferential export terms from many buyers as a less developed country.