An Analysis Of The Indian Textile And Clothing Industry

1.1 Indian Textile & Clothing Industry

India is a labour abundant country and the textiles and clothing sector is a labour intensive and traditional sector of the Indian economy. This particular industry alone accounts for about 14% of the industrial production, making 4% of GDP; and also estimates for about 11% share in the country’s total exports basket. It provides employment to 45 million people, not only does it generates jobs for its own industry but also increases scope for other complementary sectors (Ministry of Textiles, 2013). As we recall in the history Indian T&C sector has been an important part of the Indian economy, playing a prominent and promising role in our industrial development. At present also the Indian T&C sector holds

Various reasons have accounted for this, one of the main being the labour cost and vertical integration of this sector. India is second largest in the production of items like cotton yarn, raw cotton, silk and cellulostic fibre. Also worldwide India is the largest producer of jute and fourth for synthetic fibre (Ministry of Textiles). The share for Indian T&C sector in global trade is expected to increase certainly, estimated around US$100bnby 2015. The Indian T&C industry apart from enjoying lower cost of production due to abundant labour enjoys vertical integration. This industry enjoys comparative advantage over its competitors due to the following positives like raw material availability, suitability of climate conditions and also the historically rich tradition (CUTS International,

These include both trade restricting measures like the technical barriers as well as trade-promoting measures which include export subsidies and not tariffs. According to the Ministry of Commerce and Industry data the maximum cases of NTMs are in the cotton sector (19), second being in apparel and clothing items chapters(15) (i.e. HS chapters 61-63). Four types of NTMs are imposed by countries around the world, they are different across the countries, but usually include customs and rules of origin, labour and environment standards, minimum import price (Saini 2009). The flexibilities in the WTO rules there have allowed for an escalation in the non-tariff measures markedly relating to the standards, certification and labelling and licensing requirements. In the items where the developing countries mostly enjoy comparative advantage like textiles, agricultural products, engineering products, leather, pharmaceuticals etc. are majorly been subjected to such restrictions to trade. Especially barriers that have been regulatory or standard concerning have been coming to light as impediments that alter the competitiveness of the T&C exporters for the developing countries of this era. The use of NTMs and Technical Barriers to Trade (TBTs) apart from the price and quantity controls have risen from 55 to