- When Indian businessmen began setting up industries; they avoided competing with Manchester goods in the Indian market.
- Since yarn was not imported by British in India, early cotton mills in India started producing coarse cotton yarn rather than fabric.
- The yarn produced in Indian spinning mills was used by handloom weavers in India or exported to China.
- As the Swadeshi Movement began, nationalists told people to boycott foreign cloth.
- Industrial groups organised themselves to protect their collective interests.
- From 1906, the export of Indian yarn to China declined since produce from the Chinese and Japanese mills flooded the markets.
- So industrialists in India began shifting from yarn to cloth production.
- Cotton piece goods production in India almost doubled between 1900 and 1912.