India's Readymade Garments Export in the Scenario of Trade Openness: An Analysis of Trend and Structural Break

Abstract

Indian textiles have a history of fine craftsmanship, and because of that, it has its own global appeal and international demand. India has its own extensive base of raw material and manufacturing. This makes India the second-largest textile exporter in the world after China. India's share in the global textiles and apparels trade was approximately 5% in 2017. In 2017, India's textile industry contributes 7% of total industry output and employs about 45 million people directly. Its contribution to the country's GDP and export earnings in the same year was 2% and 15%, respectively. With this backdrop, the present chapter aims to investigate twin objectives. Initially, the changing growth pattern of India's readymade garment export is investigated. Along with this, the impacts of trade openness on India's readymade garment export are also scrutinized. The entire study is conducted based on the secondary data, compiled from the various issues of “Handbook of Statistics on Indian Economy,” published by “Reverse Bank of India.” The data are compiled for the period 1987–1988 to 2018–2019. The investigation of the first objective is facilitated by the “Poirer's Spline function approach.” On the contrary, for the exploration of the second objective, we have calculated the “trade openness index.” It is measured as the sum of export and import as a percentage of GDP. The study concludes that the Indian readymade garment industry shows a declining growth rate and the industry is benefited from trade openness. The study ends with suitable policy prescriptions.

Citation

Maity, S. and Sinha, A. (2021), "India's Readymade Garments Export in the Scenario of Trade Openness: An Analysis of Trend and Structural Break", Pal, M.K. (Ed.) Productivity Growth in the Manufacturing Sector, Emerald Publishing Limited, Leeds, pp. 219-229. https://doi.org/10.1108/978-1-80071-094-820211016