Abstract

The Multi Fibre Arrangement (MFA) that came to an end on January 1, 2005 has opened up a plethora of opportunities for the Indian textile industry. Global trade in textiles is expected to increase to US$ 600 billion by 2010 from US$ 356 billion in 2003. The phasing-out of MFA has ensured that quota restrictions in US, European Union and Canada which restricted textile and apparel exports from India to these regions have been removed. India and China are the two countries poised to derive the maximum benefit from the phasing out of MFA. India's quota allocation for important markets like the US, EU and Canada was very low. Post –MFA, India's share in world apparel exports have been predicted to increase from 2.5 per cent in 2003-04 to 5 per cent by 2008. With textiles accounting for almost 20 percent of Indian exports, and the industry and allied areas providing employment to around 80 million people in India, the Indian government is turning its attention to removing the bottlenecks that hinder its growth. The Indian textile industry has the advantages of high operational efficiencies in spinning and weaving, low-cost skilled labour, availability of raw materials and design capabilities. Yet, infrastructural bottlenecks like the transaction time at ports, inland transportation time, lack of initiative by textile manufacturers to go in for technological upgradation, fragmentation of the Indian textile industry etc., have been limiting the growth of the industry.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

Indian Textile industry, Multi-Fibre Arrangement, Apparel Exports, Cotton Textile Exports, Import Quota Restriction, Mahavir Spinning Mills Ltd., Arvind Mills Ltd., Alok Industries Ltd., Raymond Ltd., Indian Rayon and Industries Ltd., Welspun India Ltd., Gokaldas Exports Ltd., Siyaram Silk Mills Ltd., Royal Classic Group, Confederation of Indian Industry, CII, Value Chain, KSA Technopak and Technology Upgradation Fund Scheme, TUFS