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Lanka","attachmentId":40539680,"attachmentType":"pdf","work_url":"https://www.academia.edu/19291868/Female_Wages_in_the_Apparel_Industry_Post_MFA_The_Cases_of_Cambodia_and_Sri_Lanka","alternativeTracking":true}"><span class="material-symbols-outlined" style="font-size: 18px" translate="no">download</span><span class="ds2-5-text-link__content">Download free PDF</span></button><a class="ds2-5-text-link ds2-5-text-link--inline js-wsj-grid-card-view-pdf" href="https://www.academia.edu/19291868/Female_Wages_in_the_Apparel_Industry_Post_MFA_The_Cases_of_Cambodia_and_Sri_Lanka"><span class="ds2-5-text-link__content">View PDF</span><span class="material-symbols-outlined" style="font-size: 18px" translate="no">chevron_right</span></a></div></div><div class="ds-related-work--container js-wsj-grid-card" data-collection-position="9" data-entity-id="40153100" data-sort-order="default"><a class="ds-related-work--title js-wsj-grid-card-title ds2-5-body-md ds2-5-body-link" href="https://www.academia.edu/40153100/Indias_Exports_of_Textiles_and_Garments_Opportunities_and_Challenges">India's Exports of Textiles and Garments - Opportunities and Challenges</a><div class="ds-related-work--metadata"><a class="js-wsj-grid-card-author ds2-5-body-sm ds2-5-body-link" data-author-id="39267655" href="https://independent.academia.edu/BhandariLaveesh">Laveesh Bhandari</a></div><p class="ds-related-work--metadata ds2-5-body-xs">PHD Chamber of Commerce and Industry</p><p class="ds-related-work--abstract ds2-5-body-sm">1. The textiles and garments sector is extremely important for India. It has a share of 4 per cent in gross domestic product (GDP), 14 per cent in industrial production and employs more than 30 million people. With only 2 to 3 per cent of the import bill, it is India’s largest net foreign exchange earner. 35 per cent of India’s exports comes from textiles and garments. This is 11 billion US dollars. But this is only 3 per cent of the world market and the share of the mill sector has progressively been coming down. 2. India’s strengths are known. The major ones are availability of cotton, cheap labour, educated supervisory staff, technical and managerial skills and relatively lax pollution control norms. India has one of the finest varieties of raw cotton in the world and one of the largest acreages under cotton. India also has an extensive base in textile machinery and in the dyes and chemicals industry. 3. But there are also weaknesses, especially on quality perceptions. The strength and count variability of Indian yarn is far below international standards. There is uneveness in spinning and the supply of spliced yarn for knitting. Shrinkage rates for fabrics are far above global norms. While an average garment exporter from Hong Kong spends almost 2.5 million US dollars on investments per year, the figure is around 30,000 dollars for India. An average garment exporter from India invests around 250 dollars per machine per year, the figure is 1500 dollars for China. Most machines in India are sewing machines, there are very few special or processing machines. 4. There are several policy-induced distortions. Futures trading in cotton is not permitted, there are controls on exports of raw cotton and cotton yarn. Special fiscal treatment to power looms and handlooms distorts resource allocation. In the organized sector, labour markets are rigid and small-scale sector reservations also lead to distortions. Infrastructure support (power is an example) is inadequate and there are numerous procedural (bureaucratic) hurdles in manufacturing and exporting. As a percentage of export earnings, such transaction costs in exporting are 15 per cent for textiles and garments, the highest across all sectors. 5. The MFA (multi-fibre arrangement) bilateral quotas will be phased out by 2005, although given the Uruguay Round package, nothing much will happen before 2002. There are also problems with the liberalization package. Before 2002, there will be very little liberalization in garments. Tariffs continue to be high and there is tariff escalation. Developed countries have also been trying to circumvent liberalization through non-tariff barriers (NTBs), of which, anti-dumping and anti-subsidy investigations and safeguards measures are examples. Environmental measures can also act as NTBs. 6. Once MFA quotas go, India will also have to liberalize imports of textiles and garments. Quantitative restrictions on imports will be phased out and import duties will also be reduced to 20 per cent for yarn, 25 to 35 per cent for fabrics and 40 per cent for garments. After 2005, India will have to reckon with effective rates of protection of around 5 per cent on cotton textiles, around 10 per cent on wool, silk and synthetic textiles and around 15 per cent on textile products. 7. India’s present strengths are in the following categories – textile yarn, cotton yarn, woven cotton fabrics, woven man-made fibres, cotton synthetic weave and other textile articles. Competitiveness is not very evident in cotton, raw cotton, bleached woven cotton, continuous regenerated weaves (non-pile) and knitted fabrics. The competition is going to be from China, Turkey, Indonesia, Thailand, the Philippines, Pakistan and Bangladesh. 8. Since 1980, world trade in textiles and garments (in billion US dollars) has been growing at an average annual rate of 6.5 per cent. Textile exports have tended to slow down, growing at an average annual rate of 3 per cent. But garment exports have been growing at an average annual rate of 9 per cent. The present world market (both textiles and garments) is estimated at 350 billion US dollars annually. By 2005, in today’s dollars, it will become 550 billion. There is no reason why India should not have a 10 per cent market share, that is, exports of 55 billion US dollars (today’s dollars) by 2005. This will be fuelled especially by a growth in garment exports, with traditional exporters losing comparative advantage because of high wage costs. The phasing out of bilateral MFA quotas by January 2005 also represents a potential. But all this will not happen automatically. Initiatives are necessary – at three levels. First, there are things the government of India has to do, at multilateral negotiations. Second, there are things the government of India has to do, in terms of domestic economic reforms. Third, there are things that have to be done by industry. 9. Government initiatives at multilateral negotiation will cover the following.  Renegotiate industrial tariffs and bring down peaks and tariff escalation.  Insist on improvements in the anti-dumping and anti-subsidy agreements.  Argue for disciplines on use of safeguards.  Argue against free trade areas and rules of origin requirements. With tariffs dropping globally, free trade areas should lose their rationale. Negotiate for improvements in Article XXIV.  Argue that percentages must be stipulated for integrating all four product groups – tops and yarn, fabrics, made-ups and clothing.  SPS and TBT agreements must adhere to international standards, not to higher norms.  Contest any attempt to introduce labour issues. 10. Domestic economic reforms need to encompass the following.  Permit futures trading in cotton.  Remove controls on raw cotton border trade.  Remove controls on exports/imports of cotton yarn.  Make labour markets flexible. Minimize maintenance of old records, computerize, cut down on number of inspectors, reduce number of laws and merge social security laws.  Remove fiscal incentives in favour of power looms and handlooms.  Remove small-scale sector reservations.  Introduce VAT.  Bring down domestic capital costs through financial sector liberalization and allow Indian enterprises to borrow freely abroad.  Bring down infrastructural costs, particularly that of power.  Standardize and computerize export/import procedures, introduce electronic data interchanges (EDI), remove discretion at petty functionary levels, enforce strict penalties on errant exporters and increase communication between exporters and the government.  Ensure exchange rate permits price competitiveness. 11. But this needs to be backed up by industry initiatives along the following lines.  Invest at least 10 per cent of turnover in technological upgradation.  Upgrade technology in textile machinery and dyes and chemicals.  Enter into joint ventures and strategic alliances with foreign partners.  Move away from composite mills.  Don’t rely on special dispensations, including export-oriented units (EOUs) and export processing zones (EPZs).  Diversify from focus on exports of cotton garments and the dependence on markets in Western Europe and United States.  Move to higher value segments. 12. If all this is done, a 10 per cent market share of world exports and an export target of 55 billion US dollars (in today’s dollars) is possible.</p><div class="ds-related-work--ctas"><button class="ds2-5-text-link ds2-5-text-link--inline js-swp-download-button" data-signup-modal="{"location":"wsj-grid-card-download-pdf-modal","work_title":"India's Exports of Textiles and Garments - Opportunities and Challenges","attachmentId":60371863,"attachmentType":"rtf","work_url":"https://www.academia.edu/40153100/Indias_Exports_of_Textiles_and_Garments_Opportunities_and_Challenges","alternativeTracking":true}"><span class="material-symbols-outlined" style="font-size: 18px" translate="no">download</span><span class="ds2-5-text-link__content">Download free PDF</span></button><a class="ds2-5-text-link ds2-5-text-link--inline js-wsj-grid-card-view-pdf" href="https://www.academia.edu/40153100/Indias_Exports_of_Textiles_and_Garments_Opportunities_and_Challenges"><span class="ds2-5-text-link__content">View PDF</span><span class="material-symbols-outlined" style="font-size: 18px" translate="no">chevron_right</span></a></div></div></div></div><div class="ds-sticky-ctas--wrapper js-loswp-sticky-ctas hidden"><div class="ds-sticky-ctas--grid-container"><div class="ds-sticky-ctas--container"><button class="ds2-5-button js-swp-download-button" data-signup-modal="{"location":"continue-reading-button--sticky-ctas","attachmentId":51598922,"attachmentType":"pdf","workUrl":null}">See full PDF</button><button class="ds2-5-button ds2-5-button--secondary js-swp-download-button" data-signup-modal="{"location":"download-pdf-button--sticky-ctas","attachmentId":51598922,"attachmentType":"pdf","workUrl":null}"><span class="material-symbols-outlined" style="font-size: 20px" translate="no">download</span>Download PDF</button></div></div></div><div class="ds-below-fold--grid-container"><div class="ds-work--container js-loswp-embedded-document"><div class="attachment_preview" data-attachment="Attachment_51598922" style="display: none"><div class="js-scribd-document-container"><div class="scribd--document-loading js-scribd-document-loader" style="display: block;"><img alt="Loading..." src="//a.academia-assets.com/images/loaders/paper-load.gif" /><p>Loading Preview</p></div></div><div style="text-align: center;"><div class="scribd--no-preview-alert js-preview-unavailable"><p>Sorry, preview is currently unavailable. 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