Productivity of Indian Textile Industry in the Post Multi Fibre Agreement (MFA) Regime
DOI:
https://doi.org/10.51983/arss-2019.8.1.1507Keywords:
Textiles, MFA, Partial Productivity, Capital and Labor, JEL Code: D 24, F 14 & L 67Abstract
The system of bilateral quotas which had governed the international trade in textiles and clothing under the Multi Fibre Agreement came to an end and has been replaced by the Agreement on Textiles and Clothing (ATC) from January 1, 2005. The ATC provided for a progressive elimination of quota in four stages during the transitional period which ended on 2005. This study is an attempt to understand the impact of trade liberalization on the productivity of Indian textile industry. Estimation of labour productivity shows an improvement in the labour productivity during the post MFA period. Analysis of capital productivity reveals that average capital productivity was higher during the pre MFA period compared to post MFA period. Capital intensity estimate reveals that there has been an increase in the capital intensity for all product groups in the post MFA period compared to pre MFA.
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