Fabric is amongst the most important Indian crafts and exports. During the 11^th and 12^th century AH./17^th and 18^th century AD., considerable amounts of Indian fabrics such as Cotton, Chintz and Silk hand-woven were traded in the Persian Gulf. Hormuz, Bandar Abbas, Bandar Jask, Bandar Kong, Bushehr, Basra, Muscat, were the entrance for supplying, selling and sending Indian fabrics to Iran, Ottoman Empire, Arabia, East African coast and Europe. Iranian silk and brocade fabrics also had prosperous markets in India. Despite the importance of these exchanges in the Persian Gulf, no specific research has been done about this issue and the role of the Persian Gulf ports in aforementioned era. Focusing on a historical-analytical approach, this article studies the history of Indian fabrics trade in the Persian Gulf during the 11^th and 12^th century AH., and tests the hypothesis of “Intra Industry Trade (IIT)” of fabrics in the commercial sphere of the Persian Gulf. The findings of this research speaks of dynamism in Indian fabric markets in the Persian Gulf due to its quality, variety, good price and commercial exchange with Iranian silk fabrics. Available evidence represents the benefits of Indian, Iranian and Armenian merchants from the dynamism of Indian fabric trade in the Persian Gulf.