ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Economic Reforms and Textile Industry in India

Tirthankar Roy The textile industry in India, especially cotton textiles, has been going through a major transition since the 1992 round of trade and regulatory policy reforms. The transition has stowed down during the export and industrial recession of 1996-97 and 1997-98, but should resume if conditions improve in 1998-99. Given its scale and the nature of the change, the industry represents the most important example of structural transformation in industry induced by the reforms. This article describes the process with reference to the weaving and the textile machinery segments of the industry. The broad conclusions of the paper are the following. The change in the textile industry can be interpreted as an instance of a delayed integration with the world market. On the one hand, textiles have regained a 'leading sector' rote that it had nearly forgone in the pre-reform regime. But, on the other hand, having to compete in a world market has exposed many areas of technological and organisational weaknesses, especially in the capital goods sector.

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