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

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.


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

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    Policy Research Working Paper

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    South Asia,

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

  • Keywords

    Micro, Small and Medium Enterprise; Industrial Policy; raw material; Industrial Policies; International Trade and Investment; quality of logistics service; South East Asian; Cost of Doing Business; Technical Barriers to Trade; Trade Policies; Trade Policy; duty drawback scheme; global trade; supply chain; rules of origin; export promotion; regional trade agreement; global trading system; quality of infrastructure; export processing zone; special economic zone; export promotion program; global supply chain; balance of payment; Goods and Service Tax; economies of scale; global market; bonded warehouse; labor cost advantage; voluntary export restraint; trade policy formulation; global production network; compensation of loss; preferential market access; Letter of Credit; applied tariff rates; movement of good; cash flow problem; performance of duties; supply chain efficiency; public private partnership; public-private partnership; international trade transaction; amount of duty; cost of compliance; cost of production; free trade area; multilateral trade liberalization; mutual recognition agreement; effective market access; international trading system; performance of duty; public policy instrument; labor market regulation; human resource development; growth of trade; global economic growth; multilateral trading system; liberalization of capital; high growth rate; foreign capital inflow; pattern of specialization; delays at border; tracking and tracing; free trade agreement; trade and transportation; customs clearance procedures; payment of tariffs; repatriation of profit; customs clearance process; skill development; degree of specialization; container freight station; Logistics Performance Index; bilateral trade; comparative advantage; production capacity; cotton yarn; tariff barrier; intermediate input; finished product; restrictive policy; domestic production; foreign investor; manufacturing sector; production process; skilled workforce; tariff structure; custom duty; domestic producer; imported inputs; manufactured goods; regulatory environment; high tariff; foreign equity; garment manufacturer; duty-free access; manufactured products; supply side; export basket; public revenue; import policy; power loom; domestic tariff; capital good; employment generation; global income; apparel sector; regional production; countervailing duty; partner country; modest increase; investment regime; international market; infrastructure facility; administrative procedure; international investor; source rules; price relationship; high duties; foreign competition; apparel export; trade pact; investment policy; operational principle; business environment; institutional context; transaction cost; Retail Sector; intermediate product; Technology Transfer; poor infrastructure; foreign company; technology spillover; administrative impediment; competitive position; economic liberalization; textile materials; textile items; import value; export receipts; goods market; preferential treatment; globalized market; world economy; domestic capacity; decline of prices; processing capacity; weaving mills; productive system; higher growth; export production; domestic economy; local content; economic reform; export policy; wear clothing; public capital; technology imports; technological capability; import quota; paradigm shift; plant health; product standard; ethical standard; testing procedure; garment industry; import item; worker safety; customs tariff; consumer welfare; protectionist policy; Political Economy; regulatory measure; regulatory convergence; finished goods; trade impediment; administrative measure; cash subsidy; custom procedure; ad valorem; export ban; state agency; information asymmetry; cross-border investment; cumulative effect; international border; trade costs; marginal increase; protectionist measure; regulatory effect; legal protection; logistical support; local production; foreign ownership; accelerated depreciation; trade procedures



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Kabir,Mahfuz Singh,Surendar Ferrantino,Michael Joseph

The Textile-Clothing Value Chain in India and Bangladesh : How Appropriate Policies Can Promote (or Inhibit) Trade and Investment (English). Policy Research working paper,no. WPS 8731 Washington, D.C. : World Bank Group.