Antecedents to India's textile exports: 1985–2005
by Eve M.H. Chan, Kin Fan Au, Manas K. Sarkar
International Journal of Indian Culture and Business Management (IJICBM), Vol. 1, No. 3, 2008

Abstract: India's wealth in cotton resources has enabled the labour-oriented textile industry to become a significant contributor to the economy and employment of the country. In 2005, India's textiles export value to the world amounted to the US$8.3 billion, which represented 16% of its commodity exports. In this paper, using the data from 1985 to 2005, the economic factors affecting the textile exports between India and its top 10 importers are analysed using the gravity model with Ordinary Least Squares (OLS) technique and panel data estimation approach in order to identify the impact of the major factors that underpinned India's textile exports. The results indicate a strong support for the gravity model and illustrate that the determinants including Gross Domestic Product (GDP), real exchange rate, per capita GDP and population growth rate of the importers all have a significant impact. In contrast, the introduction of the Euro has indicated a negative effect while the formation of the World Trade Organisation shows no obvious influence in India's textile trading.

Online publication date: Sun, 13-Apr-2008

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