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Fabrics manufacturing as many other goods manufacturing, was transferred to developing countries because of cheaper labor costs. There are some advanced factories that still keep up with the new world economy dynamics. The products are made of cotton yarns imported from countries such as China and Pakistan. There is still production of in the western world and in Japan because these became home fashion accessories and are sometimes offered as gifts which imply that their manufacturing requires high quality standards.

In the United Kingdom the manufacturing of towels is sustained by The British Towel Manufacturers' Association. If we take a look into The Confederation of British Industry and predecessor archives by Alan Crookham, Michael Wilcox, Christine Woodland and Richard Storey, at the history of this association we see that was originally set up as the Manchester District Towel Manufacturers' section of the Federation of British Industries in March 1932 and presented a case for an increase in the 10 per cent tariff to the Import Duties Advisory Committee. In June 1932 the section accepted an FBI offer to provide facilities for the forming and working of a Towel Manufacturers' group inside the Federation. By 1941, the group represented 95 per cent of towel manufacturers in the United Kingdom.
At the request of the government the association formed an export group in April 1940 in order to make the allocation of raw materials to towel manufacturers simpler. The membership and committee constitution of the export group was the same as that of the main group.
In October 1942 the committee of the Towel Manufacturers' group decided to transform the group into a separate trade association, with its own funds, and wished to introduce a membership fee and a levy.
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References
A sources booklet, Alan Crookham, Michael Wilcox, Christine Woodland and Richard Storey, The Confederation of British Industry and predecessor archives.
http://www.warwick.ac.uk/services/library/mrc/ead/200BTMAcol.htm#N1266

About the Author: I write articles on luxurious towels, bed linen, robes and accessories. Find more information at http://www.christy-towels.com/