South Asian Journal of Management

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A Study of Competitiveness of the Garment Export Sectors of India and China:Revealed Comparative Advantage (RCA) Analysis


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1 Department of Business Management, Punjab Agricultural University, Punjab, India
     

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The textiles and garment sector is one of India’s significant economic sectors, contributing a significant share in the country’s industrial output and export earnings. Also, this labor-intensive sector provides employment to more than 30 million people. Many studies predict that India and China will gain a significant share of the world textiles and clothing trade due to the availability of cheap labor and other factor resources. This paper analyzes the comparative advantage of India and China for the garment sector, in the export trade. It uses Balassa’s (1965) Index of Revealed Comparative Advantage (RCA) for analyzing the export data. Also, this paper highlights the shift in the comparative advantage for India and China between 1995 and 2003. Further, it points out certain constraints restricting the growth of export share of India in the world market, offering suggestions for policy makers to boost the export share in world garment trade.
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  • A Study of Competitiveness of the Garment Export Sectors of India and China:Revealed Comparative Advantage (RCA) Analysis

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Authors

Lalit Mohan Kathuria
Department of Business Management, Punjab Agricultural University, Punjab, India

Abstract


The textiles and garment sector is one of India’s significant economic sectors, contributing a significant share in the country’s industrial output and export earnings. Also, this labor-intensive sector provides employment to more than 30 million people. Many studies predict that India and China will gain a significant share of the world textiles and clothing trade due to the availability of cheap labor and other factor resources. This paper analyzes the comparative advantage of India and China for the garment sector, in the export trade. It uses Balassa’s (1965) Index of Revealed Comparative Advantage (RCA) for analyzing the export data. Also, this paper highlights the shift in the comparative advantage for India and China between 1995 and 2003. Further, it points out certain constraints restricting the growth of export share of India in the world market, offering suggestions for policy makers to boost the export share in world garment trade.