Indian industrialists began to shift from yarn to cloth production for the following reasons: (i) The Swadeshi Movement mobilised people to boycott foreign cloth. This encouraged Indian industrialists to produce cloth, as Indian mills had a vast home market to supply, and Manchester imports into India declined. (ii) Export of Indian yarn to China declined from 1906 as produce from Chinese and Japanese mills flooded the Chinese market. So Indian industrialists to began to shift from yarn to cloth production. (iii) After the First World War, Manchester could not capture its position in Indian markets. This enabled the local industrialists in the colonies to capture the home market, and consolidate their position.