National and Global Aspects of India’s Textiles and Apparel Industry and Trade: An Overview

Abstract

The elimination of Multi-Fibre Arrangement (MFA) quotas is expected to create a new environment for world trade in textiles and apparel by vastly increasing the scope for developing countries to expand their exports and thereby creating employment in this sector. As a natural consequence, a study of the true competitiveness of the exportables of the textile and apparel items of India in the international market becomes essential in order to make an informed projection for Indian exports vis-à-vis others beyond 2005. We discuss the national or domestic aspects of the textile and clothing industry of India with special emphasis on the domestic policies affecting the structural and performance indicators of the firms in this industry. Further, we offer measures of competition among firms in an industry, such as the indicators of industrial structure and performance. It seems that the level of industrial concentration in the textile sector has gone up in the post-MFA regime.

Economic Integration and Trade Protection: Policy Issues for South Asian Countries

“…The reason behind incorporating China, along with the SAARC countries is to capture the effect of the formation of SAFTA on the largest competitor of the SAARC countries in South Asia (moreover, China‐safeguard policies regarding its T&C exports, introduced by the western countries since 2005, after China's World Trade Organization [WTO] accession in 2001, make this country inexorable for our study). Above all, it is mentioned earlier (see Kar ) that the phasing out of the bilateral MFA quota regime and its consequent replacement by ATC have shown dissimilar impacts on different countries in South‐East Asia. Hence, a study of this kind excluding China may lose its significance.…”

“…MFA was a bilaterally determined quota system that was introduced to protect the interests of the T&C manufacturers of the developed (North) countries primarily, having which used to monitor the international trade in T&C since 1974, and its integration within the General Agreement on Tariffs and Trade (GATT) framework through the Agreement on Textiles and Clothing (ATC). As it has been shown in earlier studies that existence of MFA quotas actually gave protection to the smaller and lessdeveloped countries in South-East Asia (see Kar 2012;Kar and Kar 2011), only the bigger textile giants such as India and China are expected to and eventually found to have been reaping the benefits from the withdrawal of this system. Now, we try to explore, with the help of an augmented version of the gravity model, whether the formation of regional trading arrangements (RTAs) like SAFTA serves to promote the magnitude of trade or not and if so, then whether the intra-bloc trade 3 is substantially accelerated vis-à-vis the effect of extra-bloc trade creation.…”

Multi-Market Firms and Export Quota: Effects of Withdrawal of the Multi-Fiber Arrangement

“…The production and employment implications of such adjustments can be substantial if the industry to which such a firm belongs is of critical importance. Indeed, the textile and apparel industry in India commands such a position by contributing about 4% of GDP, 14% of industrial production, 17% of export revenue, and by employing approximately 25 million workers directly and indirectly (Kar, 2012). Furthermore, the various effects of the withdrawal of export quota on the Indian manufacturers did not surface instantaneously.…”