Dilapidated, dirty and depressed, a town that was once called the Manchester of Asia smells of textile starch, thinners, garbage and sewage. Since the turn of the century, Bhiwandi, 30 km north of Mumbai, has wilted against competition from Bangladesh and Vietnam.

Bhiwandi holds more than a sixth of India’s 6.5 million power looms—machines that manufacture fabric from yarn—according to this April 2016 Economic & Political Weekly report. A congested city of about 1.5 million, it was once a key link in India’s cotton economy, which employs 25 million workers ...