The Textile industry (also known in the United Kingdom and Australia as the Rag Trade) is a term used for industries primarily concerned with the design or manufacture of clothing as well as the distribution and use of textiles.  In summary, the textile industry is primarily concerned with the design, production and distribution of yarn, cloth and clothing. The raw material may be natural, or synthetic.

A textile is a flexible material consisting of a network of natural or artificial fibers (yarn or thread). Yarn is produced by spinning raw fibers of wool, flax, cotton, hemp, or other materials to produce long strands. Textiles are formed by weaving, knitting, crocheting, knotting or tatting, felting, or braiding. The related words "fabric" and "cloth" and "material" are often used in textile assembly trades.

• Cloth may be used synonymously with fabric but is often a piece of fabric that has been processed.

Cottage stage Pre-Industrial Methods

Before the manufacturing processes were mechanized, textiles were produced in the home, and excess sold for extra money. Most cloth was made from either wool, cotton, or flax, depending on the era and location. For example, during the late mediaeval period, cotton became known as an imported fiber in northern Europe, without any knowledge of what it came from other than that it was a plant; noting its similarities to wool, people in the region could only imagine that cotton must be produced by plant-borne sheep. John Mandeville, writing in 1350, stated as fact the now-preposterous belief: "There grew there [India] a wonderful tree which bore tiny lambs on the endes of its branches. These branches were so pliable that they bent down to allow the lambs to feed when they are hungrie." This aspect is retained in the name for cotton in many European languages, such as German Baumwolle, which translates as "tree wool". By the end of the 16th century, cotton was cultivated throughout the warmer regions in Asia and the Americas. In Roman times, wool, linen and leather clothed the European population: the cotton of India was a curiosity that only naturalists had heard of, and silk, imported along the Silk Road from China, was an extravagant luxury. The use of flax fiber in the manufacturing of cloth in northern Europe dates back to Neolithic times.

Cloth was produced in the home, and the excess woven cloth was sold to merchants called clothiers who visited the village with their trains of pack-horses. Some of the cloth was made into clothes for people living in the same area and a large amount of cloth was exported.

• Clothiers or Cloth Merchant: In the Middle Ages or 16th and 17th centuries, a cloth merchant was one who owned or ran a cloth (often wool) manufacturing or wholesale import or export business. A cloth merchant might additionally have owned a number of draper's shops. Cloth was extremely expensive and cloth merchants were often very wealthy. A number of Europe's leading banking dynasties such as Medici and Berenberg built their original fortunes as cloth merchants.

The process of making cloth depends slightly on the fiber being used, but there are three main steps: preparation of fibers for spinning, spinning, and weaving or knitting. The preparation of the fibers differs the most depending on the fiber used. Flax requires retting and dressing, while wool requires carding and washing. The spinning and weaving processes are very similar between fibers though.

Spinning evolved from twisting the fibers by hand, to use of a drop spindle, to a spinning wheel. Spindles or parts of them have been found in very, very old archaeological sites; they may represent one of the earliest pieces of technology available to humankind. was invented in India between 500 and 1000 A.D.  It reached Europe via the Middle East in the European Middle Ages.

Weaving, done on a loom has been around for as long as spinning. There are some indications that weaving was already known in the Palaeolithic. An indistinct textile impression has been found at Pavlov, Moravia. Neolithic textiles are well known from finds in pile dwellings in Switzerland. One extant fragment from the Neolithic was found in Fayum at a site which dates to about 5000 BCE. There are many different types of looms, from a simple inkle loom that dates back to the Vikings, to the standard floor loom.

History during the industrial revolution

The key British industry at the beginning of the 18th century was the production of textiles made with wool from the large sheep-farming areas in the Midlands and across the country (created as a result of land-clearance and inclosure). Handlooms and spinning wheel were the tools of the trade of the weavers in their cottages, and this was a labour-intensive activity providing employment throughout Britain, with major centres being the West Country; Norwich and environs; and the West Riding of Yorkshire. The export trade in woolen goods accounted for more than a quarter of British exports during most of the 18th century, doubling between 1701 and 1770. Exports of the cotton industry centred in Lancashire had grown tenfold during this time, but still accounted for only a tenth of the value of the woollen trade.

The textile industry grew out of the industrial revolution in the 18th Century as mass production of clothing became a mainstream industry. Starting with the flying shuttle in 1733inventions were made to speed up the manufacturing process. In 1738 Lewis Paul and John Wyatt patented the Roller Spinning machine and the flyer-and-bobbin system. Lewis Paul invented a carding machine in 1748, and by 1764 the spinning jenny had also been invented. In 1771, Richard Arkwright used waterwheels to power looms for the production of cotton cloth, his invention becoming known as the water frame. In 1784, Edmund Cartwright invented the power loom. With the spinning and weaving process now mechanized, cotton mills cropped up all over Great Britain.

Textile mills originally got their power from water wheels, and thus had to be situated along a river. With the invention of the steam engine, in the 1760s to 1800's, mills no longer needed to be along rivers.

Many of the cotton mills, like the one in Lowell MA, in the US originally started with the intention of hiring local farm girls for a few years. The mill job was designed to give them a bit more money before they went back to the farm life. With the inflow of cheap labor from Ireland during the potato famine, the setup changed, as the girls became easily replaceable. Cotton mills were full of the loud clanking of the looms, as well as lint and cotton fiber. When the mills were first built a worker would work anywhere from one to four looms. As the design for the loom improved so that it stopped itself whenever a thread broke, and automatically refilled the shuttle, the number of machines a worker could work increased to up to 50.

Originally, power looms were shuttle-operated but in the early part of the 20th century the faster and more efficient shuttleless loom came into use. Today, advances in technology have produced a variety of looms designed to maximize production for specific types of material. The most common of these are air-jet looms and water-jet looms. Industrial looms can weave at speeds of six rows per second and faster.

By the latter 20th Century, the industry in the developed world had developed a bad reputation, often involving immigrants in illegal "sweat shops" full of people working on textile manufacturing and sewing machines being paid less than minimum wages. This trend has resulted due to attempts to protect existing industries which are being challenged by developing countries in South East Asia, the Indian subcontinent and more recently, Central America. Whilst globalization has seen the manufacturing outsourced to overseas labor markets, there has been a trend for the areas historically associated with the trade to shift focus to the more white collar associated industries of fashion design, fashion modeling and retail.

Areas historically involved heavily in the "rag trade" include London and Milan in Europe, SoHo district in New York City and the Flinders Lane and Richmond districts in Melbourne and Surry Hills in Sydney.