Title: Exchange rate and exporting behaviour of Indian Textiles and Clothing sector across major destination countries

Authors: P.L. Beena; Hrushikesh Mallick

Addresses: Institute for Studies in Industrial Development (ISID), New Delhi, India. ' Centre for Global Development (CGD), Washington DC, USA

Abstract: The paper analyses the role of exchange rate in determining the export behaviour of Textiles and Clothing (T&C) sector. The study found an inverse relationship between the rises in exchange rate and exports. This suggests that the devaluation of Indian rupee has not helped to boost the exports of T&C sector. The findings further indicate the significant role of demand factor in determining the export growth. The study argues that exchange rate intervention alone may not be the right solution for export promotion; therefore government should not place much emphasis on devaluing the exchange rate as a policy option to promote export competitiveness.

Keywords: exports; exchange rate; prices; WTO; World Trade Organization; exporting behaviour; India; textile industry; clothing industry; apparel industry; garment industry; currency devaluation; export competitiveness.

DOI: 10.1504/IJMEF.2011.043404

International Journal of Monetary Economics and Finance, 2011 Vol.4 No.4, pp.432 - 446

Available online: 27 Oct 2011 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article