An interesting new research is shedding more light on the use use of FTAs in India clothing firms. The study by Parul Bajaj and Anuj Sharma from BIMTECH in India looks at how exporters of textile from India use FTAs.
Methodology
The researchers look at the level of awareness of FTA’s among businesses and the use companies are making of these agreements.
The study looks at export firms in India. It focuses on the textile and clothing sector, a suitable industry for the research as textile and apparel products carry high import duty rates in most countries. Companies in this industry have usually a great usage for FTA’s
The study is based on a sample of 310 exporting firms from major textile and clothing hubs of India.
The findings
The researchers show that the level of awareness of FTA’s depends on the size of the company and the importance of exports in the firm’s revenues. The bigger companies are usually more aware of the existence of trade agreements.
They found a link between the use of trade agreements and the size of companies. In addition, they note some weak links between the use of trade agreements, the strength of employees and the year of establishment of the business.
Conclusion of the use of FTAs in India clothing firms
They conclude that smaller companies are less likely to use trade agreement. They make policy suggestions to raise awareness and the use of FTA’s to benefit all businesses.
Alegrant’s comment
The research is an addition to a body of studies indicating that FTA’s are under use, particularly by SME’s.Tthere is a need for policy makers to look at how we can help SME’s access the benefits form FTA’s so they can compete on international markets against larger players.
Source:
Parul Bajaj, & Anuj Sharma. (2022). Awareness and Utilization of Free Trade Agreements amongst the Textile and Clothing Export Firms of India. Management Insight, 18(1), 25-34. Retrieved from http://journals.smsvaranasi.com/index.php/managementinsight/article/view/1223
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