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@ Prior to 1960-61, there was virtually NO export of readymade
garments from India

@ Although garments exports are on a continuous rise, there were 2

significant phases of growth-

Ñ 1970-71 to 1975-76: share in total exports rose from 2% to 5 %

Reason associated with enormous rise in demand for Indian
handloom garments and other indigenous fabrics in US and
Europe

Ñ During 1983-84: share in total exports rose to around 12.5%

Reason is largely associated with renewed consumer preference
for cotton garments in developed countries and world wide
shortage of cotton in 1986 inflating price of cotton garments
 
c  
@ India is the second most preferred country after China for textile and
apparel sourcing.

@ Rise of exports due to several factors like - sources of raw materials,

low labour costs, entrepreneurship and design skills of Indian traders,
changes in the policies to open up Indian economy to the outside
world etc.

@ Textile Ministry also pursuing Foreign Trade Agreements (FTAs) with

US and Europe

@ Almost 40 per cent of total revenue is expected to come from these

continents in the next three-years
Contdǥ

@ The Indian textile industry size is estimated to expand to $120

billion by 2012 from the present $70-billion

@ Estimates suggest that country's textile exports have shot up from

$19.14-billion in 2006-07 to $22.13-billion in 2007-08,
registering a growth of over 15 per cent.

@ Accounts for around 4%of GDP, 14 % of industrial production and

about 20%of country's total export earnings.
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@ The Multi Fibre Arrangement (MFA, also known as the Agreement
on Textile and Clothing (ATC)) governed the world trade in
textiles and garments from 1974 through 2004, imposing quotas
on the amount developing countries could export to developed
countries.
There is need for positive efforts designed to ensure that
developing countries and especially the least developed among
them, secure a share in the growth in international trade
commensurate with the needs of their economic development.dz

BASIC PRINCIPLES
@ Non discrimination between countries: the MFN treatment,
@ Freer trade: gradually through negotiations.
@ Predictability: through bindings ,
@ Promoting: competition
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@ ATC is a transitory regime between the MFA and the integration of
trading in textiles and clothing in the multilateral trading system.
The ATC provided for a stage-wise integration process to be
completed within a period of ten years (1995-2004), divided into
four stages starting with the implementation of the agreement in
1995.

@ The product groups from which products were to be integrated at

each stage of the integration included
(I) tops and yarns
(ii) fabrics
(iii) made-up textile products and
(iv) clothing.
 
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In the first stage, each country was required to integrate 16 percent

of the total volume of imports of 1990, followed by a further 17
percent at the end of first three year and another 18 percent at the
end of third stage. The fourth stage would see the final integration of
the remaining 49 percent of trade.
www.textilesindepth.com
  
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In 2008, the Korean textile & Clothing industry enjoyed a global

market share of 2.0%, ranking sixth in the world behind
China(36.8%), EU(31.5%), Turkey(3.8%), India(3.3%), U.S.(2.9%).

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Clothing sector would offer higher gains than the textile sector-

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@ In the short term, both China and India would gain additional market
share proportionate to their current market share.

@ In the medium term India and China would have a cumulative

market share of 50 percent, in both textiles and garment imports by
USA.

@ It is estimated that India would have a market share of 13.5 percent

in textiles and 8 percent in garments in the USA market. With regard
to EU, it is estimated that the benefits are mainly in the garments
sector, with China taking a major share of 30 percent and India
gaining a market share of 8 percent.
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@ Clothing sector would offer higher gains than the textile sector, in
the post MFA regime.
@ Countries like Mexico, CBI countries, many of the African countries
emerged as exporters of readymade garments without having
much of textile base, utilizing the preferential tariff arrangement
under the quota regime.
@ Besides, countries like Bangladesh, Sri Lanka, Cambodia emerged
as garment exporters due to cost factors, in addition to the quota
benefits. Thus, it may be concluded that these countries are likely
to lose their market share in the future scenario.
@ India is cost competitive with regard to manufacture of ring-yarn,
O-E yarn, woven O-E yarn fabric, knitted ring yarn fabric and
knitted O-E yarn fabric.
@ It maybe concluded that The market losers in the short term (1-2
years) would include CBI countries, many of the sub-Saharan
African countries, Asian countries like Bangladesh and Sri Lanka.
@ The determinants of increase / decrease in market share in the
medium term would however depend upon the cost, quality and
timely.
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@ Though India is one of the major producers of cotton yarn and
fabric, the productivity of cotton as measured by yield has been
found to be lower than many countries.

@ In the manmade fiber sector, India is ranked at fifth position in

terms of capacity.

@ Share of cotton in world fiber demand declined from around 50%

in 1982 to around 38 % in 2003

@ factors that are having impact on final consumer cost are relative
interest cost power tariff, structural anomalies and productivity
level (affected by technological obsolescence).
@ A study by International Textile Manufacturers Federation,
revealed high power costs in India as compared to other countries
like Brazil, China, Italy, Korea, Turkey and USA.
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@ Allow FDI in garment retailing- presence of large retailers will
create domestic demand for RTW garments and thus push
productivity

@ Turn to high technology mode- lead to benefits of scale operations

and quality

@ Need for integration- conglomeration is one technique: right from

spinning to garment making bringing down turn around time and
improve quality.

@ The logistics and supply chain needs improvement and efficiency

@ Improve export infrastructure- investment in modernization on

ports