The study focuses on the potential impact of the multi-fibre arrangement (MFA) of textile and clothing exports to India. To test it, it uses team participation analysis techniques using commercial data from 1996 to 2006. The result shows that the exit of macro-financial assistance from the Indian textile and clothing industry has not made it possible to export significantly. Perhaps the effects of the quota regime are so entrenched that trade liberalization is still evident in exports of textile products to India. In order to protect the internal market from developing countries, the Multifibre Agreement (MFA) was introduced by industrialized countries in 1974. This regime, as the name suggests, has expanded trade restrictions on wool and synthetic fibres in addition to cotton. Macro-financial assistance imposed quotas for the amount that developing countries were able to export to developed countries, resulting in job and export losses in developing countries. Macro-financial assistance was not compatible with the philosophy of free trade and was contrary to the principles of the multilateral system. Industry contributes to employment in industrialized countries. In the European Union (EU), for example, the sector is dominated by small and medium-sized enterprises, which focus on a number of regions heavily dependent on this sector. On the other hand, developing countries have a natural advantage in textile production because of the low labour cost. Textiles and clothing are also among the sectors where developing countries are most likely to benefit from multilateral trade liberalization.
As part of the Uruguayan GATT cycle, it was decided to transfer the textile trade under the responsibility of the World Trade Organization. For the phasing out of quotas, the Agreement on Textiles and Clothing (ATC) was included in the market. The ATC was a transitional regime between macro-financial assistance and the full integration of textiles and clothing into the multilateral trading system. Integration is expected to take place in four stages over a 10-year period (1995-2005). . 16% of the total volume of textile and clothing imports listed at the time of the ATC`s entry into force (January 1, 1995). In the event of absolute change, the figures overestimate the importance of larger markets, while relative or percentage changes in exports have the opposite distortion, i.e. the importance of smaller markets. For example, compared to the United States and Nepal as India`s export market, the absolute increase in exports is expected to be greater in the former than in the latter, with the United States being a large market.
For the same reason, we can expect lower growth in Indian exports to the United States to the United States than to Nepal. The textile and apparel industry covers a wide variety of products, from high-tech plastic yarns to high-fashion items, wool fabrics, cotton bed linens and diapers. The exit phases of MAKROfinanzhilfe financial assistance under ATC were as follows: the analysis of the posted shares overcomes these restrictions taking into account the size and growth of a given market in assessing its export performance in another market.