Garment Exports From India

The welcome decision of phasing out Multi-fibre Agreement will end the regime of quotas and will unleash "competition", overwhelming condition of playing in the global market. Survival of the fittest shall become the rule of the game and the Indian clothing industry whose supply base is medium quality and small volume business shall have to brace itself and go for rapid modernisation, timely delivery and broad basing its export basket and market.

For India the Clothing industry has performed quite well in exports. It has been filling most of the quotas every year. As compared to Rs. 12 crores in 1970-71, exports have reached Rs.18, 000 crores by 1998. The major competitors in this segment of the market are developed countries, Asian Tigers like Korea, Taiwan, Hong Kong and Singapore, developing countries like Indonesia, Thailand and Malaysia and neighbouring countries like Bangladesh and Mayanmar and China, of course.

In order to ensure quality of garment exports the SSI restriction of the garment industry should be removed. Present equity participation of 24% by the foreign partners needs to be enhanced and Joint Ventures with majority share holding as well as technical collaborations should be allowed. Labour laws need a remodelling and libralisation. A research, development and training institute focused on post garment processing like washing dyeing etc. is also needed. Indian government should negotiate higher quotas from USA / EEC in accordance with its sizes and capabilities. Stream lining Internal Quota Adminstration and freezing minimum export prices is crucial for the future of the readymade garment export industry.