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Case Code: CLIBE041

Case Length: 3 pages

Period: --

Pub Date: 2005

Teaching Note: Not Available

Subject :Business Environment

Price:Rs.50

Organization :--

Industry :Textile

Countries : --

The 'New'Textile Policy *

ABSTRACT

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.

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Issues:

	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?

Introduction

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

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?

Keywords

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

* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.