Potential Supply Chains in the Textiles and Clothing Sector in South Asia

An Exploratory Study

image of Potential Supply Chains in the Textiles and Clothing Sector in South Asia
Even though individual nations in South Asia are among the world’s fastest growing economies it is, as a region, the least integrated. This pioneering study from UNCTAD, the Commonwealth Secretariat and the Centre for WTO Studies at the Indian Institute of Foreign Trade examines one of the leading manufacturing sectors in South Asia – textiles and clothing – to assess the prospects for developing production linkages through regional co-operation.

The findings show that there is significant unexploited scope for intra-regional trade which would enhance the competitiveness of the region overall. The insights gleaned from the study will also benefit other sectors and regions of the developing world, where regional integration and South–South co-operation might be important routes to trade-led development.



Conclusions and Policy Implications

The textiles and clothing sector is a leading sector in terms of trade and employment in all major south Asian countries. It constitutes more than 40 per cent of total regional exports and provides employment to more than 10 million people in most of the countries. The steady rise in T and C exports from south Asia was arrested by the global economic crisis of 2008 and the sector’s exports declined by 18 per cent, reducing its share of global exports from 7.7 per cent in 2007 to 6 per cent in 2009. There are growing competitive pressures on the sector in the region as a result not only of reduced global demand, but also the erosion of preferences caused by free trade agreements, the withdrawal of GSP+ schemes and other policyrelated developments. This makes it important to improve the cost competitiveness of the sector so that all countries in the region are able to respond positively to the existing and forthcoming global challenges. One way to increase regional competitiveness is through the formation of regional production supply chains, whereby each country exports the products in which it is competitive and imports inputs from the countries within the region which have a cost advantage.


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