In The Media ⁽⁴⁰⁰⁾

India stands on the threshold of a historic opportunity to accelerate the growth of manufacturing. Textiles and clothing account for nearly 40% of India's manufacturing output. And the time for giving this highly labour-intensive sector a major push has never been better. Will Dr. Singh's government seize the opportunity? Reform labour laws to end fragmentation in the textile industry and grab the historic but short-lived opportunity, which will come up this weekend as the quotas go. Behind the fog of the populist expenditure packages floated daily, the ray of hope for the proponents of reforms remains the prime minister himself. True, progress on reforms has been slow but the blame for that goes to the anti-reform wing of the Congress that is reasserting after being underground for 15 years. Thus, it is Dr Singh, who called for an end to the small-scale industry (SSI) reservation in a speech to the Small Industries Development Organisation some months ago. He is also the one to have called for an end to the export subsidies that risk being countervailed abroad. And he also…

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Read full article (Jagdish Bhagwati and Arvind Panagariya) (WSJ, 27 Dec 2004) Abstract: The longstanding Multi-fiber Arrangement (MFA) on Textiles -- next to agricultural subsidies and trade barriers the most objectionable trade-restricting affliction of the world trading system -- will finally become history on Jan. 1, 2005. The textile lobbies in many rich, and in some poor, countries are scrambling already to resurrect its protective effects in alternative ways: for the removal of the MFA means that the rich countries will face more competition; as will those poor countries, with no inherent ability to compete, that had developed production simply because they had a guaranteed MFA quota. The focus of the huge media attention, therefore, has been the rich drama within the textiles sphere itself: Who will win, who will lose? Yet the real story lies in the lessons that this episode offers more generally for trade policy. What are these lessons, as seen from the "textiles lens"? When the MFA's demise was negotiated at the conclusion of the Uruguay Round, a 10-year "gradual" removal of restrictions was agreed to,…

The quota regime that has governed the exports of textiles and clothing from developing countries to the United States, European Union (EU) and a few other developed countries for nearly four decades will meet its demise on January 1, 2005. Is India ready to capture a much larger share of exports to these markets? Read full article The quota regime that has governed the exports of textiles and clothing from developing countries to the United States, European Union (EU) and a few other developed countries for nearly four decades will meet its demise on January 1, 2005. Is India ready to capture a much larger share of exports to these markets? Clothing production, which involves cutting fabric into different pieces, grouping them by different parts and sewing them into complete garments is one of the most unskilled-labour-intensive activities.

Few proponents of reforms had thought that in a controversy between the Planning Commission deputy chairman Montek Singh Ahluwalia who symbolises pro-market reforms and the Left that abhors them, they could side with the latter. Yet, sadly, that is where some of us find ourselves in the controversy over the appointment of foreigners and employees of multilateral institutions to the consultative groups of the Planning Commission.Few proponents of reforms had thought that in a controversy between the Planning Commission deputy chairman Montek Singh Ahluwalia who symbolises pro-market reforms and the Left that abhors them, they could side with the latter. Read full article Few proponents of reforms had thought that in a controversy between the Planning Commission deputy chairman Montek Singh Ahluwalia who symbolises pro-market reforms and the Left that abhors them, they could side with the latter. Yet, sadly, that is where some of us find ourselves in the controversy over the appointment of foreigners and employees of multilateral institutions to the consultative groups of the Planning Commission. Admirers of Mr Ahluwalia, among whom I count myself, are acutely aware of…