Liberalization of Textiles and Clothing Trade and Evolving Global and Indian Trade Scenario

Before the liberalization of Textiles and Clothing trade, export from developing countries to developed countries was subject to selective quantitative restrictions to protect the industry of the importing country. The General Agreement on Tariffs and Trade over a period of 47 years facilitated world trade with a view to bind tariffs and foster liberalization. But as world trade grew complex the General Agreement was found wanting and the Multifibre Arrangement was drafted to carry forward liberalization of textiles and clothing trade more effectively. In 1994 the Multifibre Arrangement gave way to the WTO Agreement on Textiles and Clothing, a ten year liberalization process that was undertaken to remove the existing quota in stages. This liberalization of trade altered the level of employment in regions where the textile and clothing industries were important. While certain regions lost, others gained in this arena.This liberalization reshaped trade across the globe in the global textiles and clothing markets. As a leading participant in this trade, India too was directly affected by these policy changes.