The Hindu Business Line : The right `FiT' for textiles, post-quota era

With quota abolition in global textile trade around the corner, the Government, in collaboration with the UNCTAD'S International Trade Centre, has introduced an IT-based benchmarking tool called `The FiT', which would enable firms to compare their performance with that of competitors, both at the domestic and international levels.

`The FiT', which is targeted at SMEs in the garment business, compares and positions the performance of an enterprise and operates on a completely confidential basis, according to industry players.

"The software provides an analytical basis for identifying strengths and weaknesses in the global performance of an enterprise," a garment manufacturer said.

The centre and the Textiles Committee (which is implementing the scheme on behalf of the Ministry of Textiles) have initiated a collaborative effort to introduce `The FiT' to garment units through a series of workshops planned in the run-up to the quota phase-out.

According to industry players, during the quota regime under the MFA, it has been difficult for many of the garment manufacturers and exporters to ascertain their level of competitiveness compared to others.

While quotas ensured assured business till now, the SMEs are now asking questions about their ability to compete successfully in a quota-free regime.

"Currently, there are too many small and fragmented capacities in the country. Remaining competitive in the post-quota scenario is the biggest worry for a large number of enterprises, especially for those in the SME sector," said an Apparel Export Promotion Council (AEPC) official.

Experts predict that the transition to the post-quota regime could have a negative impact on SMEs, especially if the trend towards pure economies of scale and mass production prevails.

Pricing pressure following the opening up of the markets is another factor that has enterprises worried.

Post-quota, India and China are predicted to be the major beneficiaries in the apparel and textiles trade.

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