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Sectoral Strategies for Export - The Indian Textile Industry: The Road Ahead…


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Sectoral Strategies for Export - The Indian Textile Industry: The Road Ahead…

... Sectoral Strategies for Export The Indian Textile Industry: The Road Ahead... Lavanya Swaminathan EXECUTIVE SUMMARY The global textile industry is set to undergo a significant transformation. On December 31,2004, the Agreement on Textiles and Clothing (ATC) will expire, and with it the quota system for international trade in textiles and clothing will no longer be used to govern international trade. By 2005, all quotas on clothing and textiles will have disappeared. As a result, the textile industry in India is going to face greatly increasing competition after 2005. Much of this competition will come from China, whose high capacity to produce textiles is held back today only by the ATC quota system. As in many other countries, India's textile sector is one of its oldest industries and tends to be more traditional in terms of organization and business practices. The traditional nature of the textile sector is going to be a significant barrier to India

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