Our Bureau

New Delhi , Jan. 1

THE phasing out of the multi-fibre agreement (MFA) on January 1 provides India the opportunity to increase its share in global textiles and garments exports to 8 per cent in 2010 form the present 3.9 per cent.

This would enable the sector achieve sales of $50 billion. According to a study by the PHD Chamber of Commerce and Industry (PHDCCI), due to its inherent cost and operational advantages, India is set to pocket a larger share of the world textile and garment export market, which is projected to grow to about $655 billion by 2010. The study points out that with the termination of the MFA, India's garments segment is poised to fuel the country's textile and garments exports as this segment provides the highest per unit realisation and has high value added content.

India's textile exports are likely to see a substantial jump to the US and the European Union. According to the study, in the case of the US, India's market share in garments is estimated to quadruple to 15 per cent in the post MFA period, up from the current four per cent.

In the European Union, the share is expected to increase to 9 per cent from 6 per cent.

According to Mr K.N. Memani, President, PHDCCI, "India is placed in an advantageous position to exploit the larger market available in the post MFA regime. This is because India has a comparative advantage in textiles and garments, which emanates from the low wage costs and access to domestically produced fabric and other inputs".

PHDCCI further noted that India's comparative advantage is higher than China and South /East Asia in both textile and clothing.

In textiles, India's advantage stands at 4.67 compared to 3.18 of China. In garments too, it is marginally higher at 3.90 compared to 3.64 of China.

The figures for comparative advantage for textiles for Indonesia, South Korea, Malaysia, the Philippines, Thailand and Vietnam are 1.98, 2.49, 0.36, 0.41, 1.16, and 1.12, respectively compared to India's 4.67.