The textile industry of Serbia in the last twenty years continuously records of physical decline in production volume, number of employees and participation in the creation of gross domestic product, so that her condition is poor in general. However, in addition, it has retained recognizable export potential measured by the absolute volume of exports and its relative share in total exports of the country. Global trade liberalization process relations, in which Serbia actively involved entering into multilateral and bilateral agreements with major trading partners, are the new management challenges for textile industry. In these conditions, market factors verified the competitiveness of textile industry of Serbia are not in themselves sufficient to increase exports, investment and employment growth. Creating a favorable institutional environment for the development of this industry, through clearly defined and precise instruments of industrial policy, are a necessary condition for its increased participation in the economic development of the country.