<P> The gems and jewellery industry has been economically active in India for several thousand years . Until the 18th century, India was the only major reliable source of diamonds . Now, South Africa and Australia are the major sources of diamonds and precious metals, but along with Antwerp, New York, and Ramat Gan, Indian cities such as Surat and Mumbai are the hubs of world's jewellery polishing, cutting, precision finishing, supply and trade . Unlike other centres, the gems and jewellery industry in India is primarily artisan - driven; the sector is manual, highly fragmented, and almost entirely served by family - owned operations . </P> <P> The particular strength of this sub-sector is in precision cutting, polishing and processing small diamonds (below one carat). India is also a hub for processing of larger diamonds, pearls and other precious stones . Statistically, 11 out of 12 diamonds set in any jewellery in the world are cut and polished in India . It is also a major hub of gold and other precious - metal - based jewellery . Domestic demand for gold and jewellery products is another driver of India's GDP . </P> <P> Textile industry contributes about 4 per cent to the country's GDP, 14 per cent of the industrial production, and 17 per cent to export earnings . India's textile industry has transformed in recent years from a declining sector to a rapidly developing one . After freeing the industry in 2004--2005 from a number of limitations, primarily financial, the government permitted massive investment inflows, both domestic and foreign . From 2004 to 2008, total investment into the textile sector increased by 27 billion dollars . Ludhiana produces 90% of woollens in India and is known as the Manchester of India . Tirupur has gained universal recognition as the leading source of hosiery, knitted garments, casual wear and sportswear . Expanding textile centres such as Ichalkaranji enjoy one of the highest per - capita incomes in the country . India's cotton farms, fibre and textile industry provides employment to 45 million people in India, including some child labour (1%). The sector is estimated to employ around 400,000 children under the age of 18 . </P> <P> With strength of over 1.3 million active personnel, India has the third - largest military force and the largest volunteer army . The total budget sanctioned for the Indian military for the financial year 2017 was (US $53.5 billion). Defence spending is expected to rise to US $62 billion by 2022 . </P>

Which is the largest source of national income in india