Competitiveness of India's textile industry in the WTO era

摘要

The textile and clothing industry is one of the largest indus-I trial sectors in India. Abolition of licensing controls on the Indian industry and the Uruguay Round negotiations resulting in a 10-year phase out of textile and clothing export quotas under ATC posed a great opportunity and challenge. There has been considerable speculation and divergence of opinion on how Indian exports may be affected with removal of MFA quotas. One school of thought is that Indian industry, freed from quota shackles, will be able to boost exports. The other is that MFA quotas provide secure access to the US and EU markets, which may suffer if quotas are removed. Indian industry may not be able to withstand international competition in a quota-free regime. India primarily supplies the lower-end of the clothing market in basic clothing Categories. The productivity of Indian firms is rather poor in comparison to world. Both of these facts give the image of low-end operator to India in world clothing market, affecting sourcing of high value item from India. The unfavorable cost competitiveness is also caused due to nonavailability of raw material (fabric) particularly MMF which is being increasingly imported from China, Taiwan and Korea.