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Estimating the Impact of WTO and Domestic Reforms on the Indian Cotton and Textile Sectors: a General-Equilibrium Approach

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  • Aziz Elbehri
  • Thomas Hertel
  • Will Martin

Abstract

The agreement to abolish the quotas on textiles and clothing introduced under the Multi-fiber Arrangement (MFA) will create a new and much more competitive world market for India's exports of textiles and clothing. India's inefficient and costly policies, such as cotton export quotas, the hank yarn obligation, and the restrictive policies on foreign investment that have held back productivity in the Indian apparel sector, will impose serious costs. The authors consider the implications of reforming these policies in an open trading environment using a multiregion, applied general-equilibrium model. They find that the costs of these policies to India increase substantially following abolition of the MFA; the benefits to India from domestic reforms are considerably enhanced when there is global free trade in textiles and apparel. Copyright Blackwell Publishing Ltd 2003.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 7 (2003)
Issue (Month): 3 (08)
Pages: 343-359

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Handle: RePEc:bla:rdevec:v:7:y:2003:i:3:p:343-359

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Cited by:
  1. Kathuria, Sanjay & Martin, Will & Bhardwaj, Anjali, 2001. "Implications for South Asian countries for abolishing the Multifibre Arrangement," Policy Research Working Paper Series 2721, The World Bank.
  2. Arief Anshory Yusuf, 2004. "Poverty and Environmental Degradation: Searching for Theoretical Linkages," Working Papers in Economics and Development Studies (WoPEDS) 200403, Department of Economics, Padjadjaran University, revised Oct 2004.
  3. Peter Walkenhorst, 2004. "Liberalising Trade in Textiles and Clothing: A Survey of Quantitative Studies," International Trade 0401007, EconWPA.
  4. Kyvik Nord°as, Hildegunn, 2005. "Labour implications of the textiles and clothing quota phase-out," ILO Working Papers 374452, International Labour Organization.
  5. Valerie Cerra & Sandra A. Rivera & Sweta C. Saxena, 2005. "Crouching Tiger, Hidden Dragon: What Are the Consequences of China’s WTO Entry for India’s Trade?," International Trade 0508005, EconWPA.
  6. International Monetary Fund, 2005. "Crouching Tiger, Hidden Dragon," IMF Working Papers 05/101, International Monetary Fund.

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