India's textile and clothing industry is the country's oldest, largest, and provides the highest number of jobs next to farming.

Officially, India is aiming at a target of $50 billion in annual textile exports by 2010, which is about four times the current figure of $14 billion.

In fact, the country's commerce minister expects a 50 percent growth in exports to freed U.S. and EU markets in the first year alone.

At the same time, competition between India and other textile producing nations will likely heat up. For example, as a proportion of total cost, labor costs in India are only 6 percent, compared to 10 percent in China, 19 percent in Mexico, 22 percent in Thailand, 29 percent in Turkey, 51 percent in South Korea and 69 percent in Germany. Only Indonesia has a lower labor cost at 5 percent.

India also enjoys raw material advantage as the world's third-largest producer of cotton, second-largest exporter of cotton textiles among low-cost countries, and fourth-largest exporter of synthetic yarn and fabric.