Corporate Strategy Case Study

Indian Textile Industry: Implications After MFA Phase out

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Abstract:
In January 2005, with the phase out of the Multi Fibre Agreement (MFA), the quota system in the world textile market came to an end. In the post quota era, Indian textile exports were expected to increase from US$15 billion in 2005 to US$50 billion by 2010. India had the advantage of low cost labour, availability of raw materials in abundance, and encouragement by the government. India also had a significant presence in the global textile market. However, India lacked infrastructure and modern technology. The case discusses the opportunities and challenges for the Indian textile industry in the post quota era. It also throws light on the strategy adopted by Indian textile majors and small and medium enterprises and discusses whether the removal of the MFA will be a gain or a loss for the Indian textile industry.

Pedagogical Objectives:

• The case discusses the opportunities and challenges for the Indian textile industry in the post quota era
• It also enlightens on the strategy adopted by Indian textile industry
• The case also discusses whether the removal of the MFA will be a gain or a loss for the Indian textile industry

Keywords : Multi-fibre Agreement; Exports; Quota; Corporate Strategies Case Study