A Study of Indian Textiles and Clothing Sector through a Gravity Model Approach

Introduction:

Economic integration refers to trade unification between countries or regions by partial or full abolishing of customs tariffs on trade taking place within the borders of each country. With no customs duties being paid within the integrated area, it is meant in turn to lead to lower prices for producers and consumers with the goal to increase the overall trade. One important reason for the growing popularity of preferential trade agreements (PTAs) is the apparently difficult process and dreary prospects for progress on the multilateral agenda. The global trade talks were suspended in Geneva on 24 July 2006 after major players in the WTO failed again to reach a consensus on agricultural subsidies and nonagricultural market access. The General Council of the WTO, at its meeting on 27-28 July 2006, supported a recommendation by the Director-General to suspend the negotiations on the Doha Development Agenda. This collapse of WTO talks promoted more bilateral trading agreements worldwide, particularly in Asia to enhance intra-regional trade through preferential and free trading arrangements (Bhattacharya & Bhattacharya, 2006).

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