The 'New'Textile Policy *



Case Code : CLIBE041
Publication date : 2005
Subject : Business Environment
Industry : Textile
Length : 03 Pages


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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

The caselet discuss the scenario in the global textile industry in the pre- and post-Multi Fiber Agreement (MFA) period. The post quota regime and its impact on various countries and the benefits that have accrued to the Indian textile industry in the post quota textile regime are also covered. The caselet evaluates the ability of Indian textile exporters to meet the challenges of the post quota scenario.


Implications of Multi Fiber Agreement (MFA).
Features of Agreement on Textiles and Clothing (ATC).
Where do Indian garment exporters stand after elimination of MFA quotas?
How would the Indian Textile Industry fare under new textiles policy?


The textile sector remained outside the General Agreement on Tariffs and Trade (GATT) for many decades. It was the Multi Fiber Agreement (MFA) that governed world trade in textiles and clothing since 1974.

Under the MFA, many industrial countries established quotas on import of textiles and clothing from more competitive developing countries.

Though the MFA was supposed to operate for four years and was intended to allow...

Questions for Discussion:

1. The dismantling of quotas offers challenges as well as opportunities for the Indian textile industry. Explain the challenges for the Indian textile industry after the phase-out of the MFA.
2. How will the phase-out of the MFA help the Indian textile industry? What are the opportunities for the Indian textile industry under the new textile regime?

Key words:
General Agreement on Tariffs and Trade (GATT), Multi Fiber Agreement (MFA), Quotas, Tariffs, Agreement on Textiles and Clothing (ATC), Caribbean Basin Initiative (CBI), NAFTA, Capital investment, Modernization, automation

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