Market Resurgence, Deregulation, and Industrial Response-Indian Cotton Textiles in 1990s

The cotton mill industry in India suffered sustained low profitability from the 1970s until recently, usually attributed to stagnation in home demand for cotton cloth, labour market segmentation and unfriendly policies. Since about 1987, deregulation and liberalisation eased some of these problems, with the result that average profits and investment rates have improved, though the extent and nature of the revival continue to be influenced by structural constraints such as labour-market segmentation and shortage of resources.