Post-MFA Analysis of Indian Textile Exports

By : Greeshma Manoj , S Muraleedharan

Page No: 336-344

Abstract
The Multi Fibre Agreement (MFA), which had governed the global textile and apparel trade was replaced by the Agreement on Textiles and Clothing (ATC) on January 1, 2005. The removal of quota restrictions has brought comparative advantage back to significant surplus economies such as China and India, and has also provided significant opportunities as well as challenges to the developing economies. Compared to its competitors, the Indian textile industry enjoys certain advantages, but at the same time, the industry also faces numerous challenges in the changed trade scenario. In this context, the present study analyses the performance of the Indian textile industry in terms of its export performance changes in the composition and destination of textile exports in the post-MFA period. The analysis period is from 1990-91 to 2020-21, divided into a transition period (1990-2004) and a post-MFA period (2005-2020). The annual growth of textile exports from India registered fluctuations both during the transition and post-MFA regime. The mean values of the major subsectors of Indian textiles, viz, readymade garments, cotton textiles, and manmade textiles were higher in the post-MFA than during the transition period. The regression results show improved performance in the exports of textiles, readymade garments, cotton textiles, and manmade textiles in the post-MFA period.

Authors :
Greeshma Manoj : Associate Professor, Department of Economics, CHRIST (Deemed to be University), Bangalore.
S Muraleedharan : Associate Professor (Retired), Visiting Faculty, KNRC, MG University, Kottayam, Centre for Budget Studies, CUSAT
 

DOI: https://doi.org/10.32381/PROD.2023.64.03.10