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Home > Business > Business Headline > Report

Only 25% textile firms know of quota removal

Monica Gupta in New Delhi | January 20, 2005 11:09 IST

Even though the textile export quota has been dismantled, not everybody in India is aware of it.

Only the large textiles companies are - small firms do not seem to have any clue on what is happening and, therefore, the question of these firms preparing to face a quota-free regime does not arise.

A survey conducted by the Research and Information System for Non-Aligned and Other Developing Countries has revealed that 75 of the 100 firms covered in the study are not aware of the development.

The firms included in the sample for a discussion paper titled 'Industrial Restructuring and Export Competitiveness of the Textiles and Clothing Sector in Saarc in the Context of MFA phase-out' covered the textiles and the clothing sector in different parts of the country and those involved in the production of a diverse range of products.

The firms were placed in two categories - big and small - on the basis of the number of employees.

The study found the level of awareness about government-run schemes like the Textiles Upgradation Fund was nowhere near being satisfactory. Only 45 per cent of the respondents were aware of the scheme, which is aimed at making cheaper funds available for modernisation.

"It needs to be highlighted that preparedness on behalf of the government in terms of information dissemination, infrastructure availability and supply intermediates also need to be improved considerably so as to improve export competitiveness," the paper said.

Low awareness and modernisation are matched by low levels of training for use of new technologies.

The study pointed out that 55 per cent of the exporters covered in the sample provided no direct training to their workforce.

An earlier study in Sri Lanka had also found that inadequate training of managers and workers was one of the most important factors hampering productivity and competitiveness in the island nation.

In terms of trade barriers coming up in developed countries, the survey noted the industry as a whole considered environment and labour standards as the highest threat, followed by trade diversion effects, product standards and transitional safeguards.

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