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The Textile-Clothing Value Chain in India and Bangladesh : How Appropriate Policies Can Promote (or Inhibit) Trade and Investment

Author

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  • Kabir,Mahfuz
  • Singh,Surendar
  • Ferrantino,Michael Joseph

Abstract

There are significant value chain linkages between India and Bangladesh, particularly in the textile and apparel sector. India specializes in the upstream segment, supplying such intermediate inputs as silk, cotton, yarn, and fabrics to Bangladesh. Bangladesh specializes in the downstream final apparel segment, exporting worldwide as well as to India. Tariffs and nontariff barriers in both countries inhibit the growth of value chain linkages. In addition, subsidies and other industrial policies in India distort incentives away from the natural pattern of specialization. The results of a new survey of textile and clothing firms in both countries corroborate these findings. Reforms in trade policy (including rules of origin), trade facilitation, trade-related standards, and institutions could help both countries better take advantage of value chain linkages.

Suggested Citation

  • Kabir,Mahfuz & Singh,Surendar & Ferrantino,Michael Joseph, 2019. "The Textile-Clothing Value Chain in India and Bangladesh : How Appropriate Policies Can Promote (or Inhibit) Trade and Investment," Policy Research Working Paper Series 8731, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8731
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    Cited by:

    1. Nith, Kosal, 2019. "Cambodian place in the International trade of Textile and Clothing: Threat and Opportunity," MPRA Paper 98591, University Library of Munich, Germany.
    2. Sytsma, Tobias, 2019. "Rules of Origin Liberalization with Multi-Product Firms: Theory and Evidence from Bangladeshi Apparel Exporters," MPRA Paper 95956, University Library of Munich, Germany.

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