Indian Textile Industry:Stifled by Warped Policies

The Indian textile industry is too fragmented and obsolete to benefit from the market openings which will follow the elimination of quota restraints. Evasion of excise duty is the basis of competitive advantage in the domestic textile industry, and this has driven the better units in the organised sector away from the domestic market into exports. But exporting units are vulnerable if they are deprived of access to the domestic market. It may be too late for government to untangle the knots it has created, but at least the 2002-03 budget proposals are a step in the right direction.