Questions on Textile Industry Competitiveness BADRI NARAYANAN G The large amount of literature examining the phasing out of MFA quotas in the Indian textile and apparel sectors, including Hashim (2005), on which this comment is based, seems to be lacking in a few essential aspects. To begin with firstly, despite the fact that the Indian garment sector consists primarily of a huge unorganised sector, almost all of these research articles are based on the data from Annual Survey of Industries or some other sources covering mostly the organised sector. Secondly, most research articles do not take into account the probable imposition of new non-tariff barriers in terms of labour and environmental standards in a post-MFA regime, in which case the benefits arising from the removal of quotas might be neutralised or at least mitigated. A closely related point is that immediate labour reforms, called for in most papers, may, in fact, act against the compliance with such international standards, leading to long-run losses. Thirdly, despite various costs involved in credit disbursement under the TUFS scheme, it is seen that the number of applications rejected are very few, rendering the recommendation of easing the process of credit disbursement somewhat redundant. These points have been dealt with at length in this comment, in addition to a few specific observations pertaining to Hashim (2005).
