*Associate Professor and Head of the Department, Global School of Foreign Trade, Madurai
**Professor, PSG Institute of Management, Coimbatore
Online published on 21 November, 2013.
The textile and garment industry is one of the important industries in the global market. This industry typifies the development of global productive chains in the world economy. The global production network in this industry is controlled by the TNCs (Trans National Corporation), who are traders and retailers and who set the terms for others in the chain, and decide what to produce and where to produce. The EU and USA together account for 70–80 percent of the world textile trade and 73.00 percent of the world clothing trade. The TNC buyers in EU and USA therefore enjoy a powerful position in the world economy. The total activities, from design to raw materials to final products and distribution, are allocated across countries by these retailers as per the comparative advantages of countries. As the developing countries have the advantage in low labour costs; labour intensive parts of the global commodity chain are located in these countries. With the expiry of the MFA (Multi Fibre Arrangement), developing countries have an opportunity to attract global retailers to locate production in their countries (Hirway Indira 2008).
