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The Multi Fibre Arrangement (MFA) that came to an end on 1 January 2005, has opened up a plethora of opportunities for the Indian textile industry. With textiles accounting for almost 20 percent of Indian exports, and the industry and allied areas providing employment to around 80 million people in India, the Indian government is turning its attention to removing the bottlenecks that hinder its growth. The Indian textile industry has the advantages of: (1) high operational efficiencies in spinning and weaving; (2) lowcost skilled labour; (3) availability of raw materials; and (4) design capabilities. Yet, infrastructural bottlenecks, like the transaction time at ports, inland transportation time, lack of initiative by textile manufacturers to go in for technological upgradation, fragmentation of the Indian textile industry etc, have been limiting the growth of the industry. Analysts have a few recommendations to make on ways to increase the competitiveness of the Indian textile industry. The government should encourage the closure of non-competitive mills and exporters should move up the value chain by focusing on apparel exports rather than fibre exports. Also, Indian companies should acquire companies abroad to gain direct entry into markets for value-added products in the European, Japanese, and US markets.