ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Post-MFA: Making the Textile and Garment Industry Competitive

With the Multi-Fibre Agreement (MFA) coming to an end, competition in the Indian textile and garment industries will increase manifold. One of the main factors determining their competitiveness would be unit cost, where India has fared poorly in the recent past. The unit cost depends upon factor prices and productivity level. The present study attempts to examine these factors in detail for the cotton yarn and garment industries for selected states using panel data analysis for 1989-97. The study suggests that large-scale production should be encouraged in this sector. Disbursement of credit, cheaper raw materials, greater availability of electricity at reasonable rates, promotion of better capacity utilisation and flexible labour laws are some other steps necessary to help the cotton yarn and garment industries become more cost-effective.

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