The phasing out of the quota regime will open up a host of new opportunities for the textile exporters worldwide. Challenging times lie ahead for developing countries like India, which are accustomed to operating under the shield of a quota system for decades.

With barely seven months left for the quota abolition, it is being debated whether the Indian textile industry is equipped to overcome the hurdles and make most of the opportunities that will arise. The Multi-Fiber Arrangement (MFA) will be eliminated from January 1, 2005 and will bring the entire textile and apparel products under the GATT discipline. The post quota regime will create benefits and pose challenges for all the countries participating in MFA, India being no exception. The developing countries will have free access to the developed world and can expand their horizons. With no restrictions on the volumes, the exporters can increase their presence especially in the European Union (EU), the US and other markets.

Estimated at Rs. 1,50,000 cr, textiles is a very important sector in the Indian economy and plays a vital role in the overall growth of the economy. It is a crucial means for obtaining foreign exchange and is the second largest sector in terms of direct employment, after agriculture, engaging 18% (35 million people) of the Indian workforce. It also contributes 6% to GDP, 14% to industrial production and around 35% of gross export earnings. Currently, India's share of global textile exports is 3%.

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