Phasing out of Multi-fibre Arrangement: implications for the Indian garment exporting firms

The study suggests that the entrepreneurs in the Indian clothing industry is all set to take on the challenges and opportunities created by the signing of the GATT-94's Final Act by the Government of India. Small and medium enterprises in the industry are confident about their inherent competitive advantage that would facilitate greater market penetration. Yet, they realize that China, Pakistan and Bangladesh would emerge as major rivals in the global market along with multinationals.They have serious doubt about the distribution of actual gains during the transition period as they view the process and pace of integration envisaged in the GATT-94 Agreement as disproportionately biased towards the developed countries. The pattern of phasing out of MFA would practically deprive them of their access to real benefits. Similarly, along with the disappearances of the restrictive regime of quotas, they see the possibility of new types of barriers emerging in future. It is this uncertainty, which spreads over the optimism of Indian firms in the garment sector like a layer of mist that needs attention in the policy making fora.