2. PROBLEM UNDER STUDY:
Textile Industry:
The phasing out of the international quota system is a major turning point for the Indian textile industry as opportunity and threat. The textile industry is among the SME intensive sectors in India, largely an outcome of government policies during the early years of Independence. Focusing on promoting domestic employment, large scale production in the textile industry was curtailed through the restrictions on total capacity and level mechanization. Several textile items were reserved for the Small and Medium Enterprises in Textile segment. These policies promoted the extensive growth of Small and Medium Enterprises in Textile that were highly labour intensive, though it eroded the competitiveness of the industry and acted as a disincentive for capital investment.
Opportunities:
The small and medium industrial sector, which plays a pivotal role in the Indian economy in terms of employment and growth, has recorded a high rate of growth since independence in spite of stiff competition from the large sector.
1. Quota Free Market:
In the new scenario of a quota‐free world, the readymade garments sector will play a crucial role in the economy, in terms of contributing to exports as well as employment generation, considering its inherent labour‐intensive nature. In the cloth production segment, the hosiery and mill sectors are likely to be the gainers.
2. De-reservation of Textile