Yatin S. Karpe
North Carolina State University

Jan M. Hathcote
The University of Georgia

The textile industry in India makes an enormous and multi-directional contribution to the domestic economy. The industry accounts for nearly 20% of the total national industrial production and provides employment to over 15 million people. It also accounts for more than 30% of exports, making it India’s largest net foreign exchange industry (Dalmia, 1994). In addition, India’s economic situation has improved dramatically since the Indian government introduced new economic reforms in 1991, leading to liberalization in government policies and a significant increase in its foreign exchange reserve position.

The purpose of the study was to examine the global competitive positioning of India’s cotton textile industry using Porter’s (1990) theory of competitive advantage of nations. This theory analyzes a nation’s competitive advantage in one or more industries using a framework consisting of (a) factor conditions, (b) demand conditions, (c) related and supporting industries, and (d) firm strategy, structure and rivalry. The main source of data collection was secondary data. The study supports India’s global competitive advantage in the cotton textile industry.

Dalmia, R. K., Indian Fabric Industry in Global Competition. In M.S. Teli (Ed.) Integrating Indian Textile Industry into the World Economy: The Golden Textile Conference, Bombay: The Textile Association of India, 1994, 54-60.

Porter, Michael E., The Competitive Advantage of Nations, London: The Macmillan Press Limited, 1990.