Industry Development at COIR: Trade Reforms and India's Export Results

Industry Development at COIR: Trade Reforms and India's Export Results

DOI: 10.4018/979-8-3693-1994-9.ch013
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Abstract

In developing India, the traditional coir industry employs 0.55 million people. Production of coconuts and coir is dominated by Kerala. Karnataka and Tamilnadu afterwards provide good coir. India is benefiting from the manufacturing of coir. This is having an impact on the coir sector due to commercial enterprises. This research looked at the effects of two trade reforms on the development, performance, and solution of India's coir sector. Trade influences trade volume and propels growth. Trade growth and volume are impacted by trade liberalization. Two significant trade agreements that had an impact on the coir business were the WTO Agreement on Textiles and Clothing (ATC) and the GATT Multi-Fiber Agreement (MFA). Data for the study came from the Coir Board's annual reports as well as websites belonging to the Reserve Bank of India, Ministry of External Affairs, Ministry of Commerce and Industry, and Coir Board. Exports under various trade regimes were examined using the CAGR and periodic growth rates.
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Introduction

India's economy was mostly rural and industrially underdeveloped when it gained its freedom for a variety of reasons. Despite the nation's repeated deliberate endeavors to boost industrialization, this sector's percentage of GDP hasn't improved. Because of the agricultural sector's prominence, there were many conventional and agro-based businesses that were present and continuously expanded. We had strong trade connections with other nations, especially the Arab world, prior to gaining our formal independence. These ties drive these agro-based and traditional businesses. But British dominance changed the industrial pattern to their advantage. Either way, after Independence, there was purposeful meddling so that five-year plans could be used to establish a strong industrial base for the country. India created and advanced a few key and significant industries as a consequence. But the importance of small, traditional agro-businesses never goes away.

Trade promotes the growth of industries as it is a progress engine. International and domestic trade is both possible. However, the influence of global commerce on industrial performance is stronger due to technical transfer. But trade volume is also influenced by other factors. Changes in both domestic and foreign commerce have a significant and enduring impact on a nation's export performance and, in turn, its development. This essay aims to investigate how different trade reforms have affected the export performance of the coir industry, a prominent and long-standing industry in India, especially in Kerala.

The Committee on Commodity Problems (FAO, UN, 2011) looked at export patterns for Jute and Hard Fibers (JHFs) between 1996 and 2010. They concluded that two major turning events for the worldwide trade in JHFs were the adoption of the WTO Uruguay Round accords since 1996 and the Multi-Fibre Agreement (MFA) phase-out in 2004. Therefore, this MFA, its phase-out, and its elimination as a consequence of the adoption of ATC under WTO have a greater impact on the production and exports of fiber and fiber-related goods. For that reason, I tried to look at trends in India's coir exports over those years. This performance was compared to India's total exports in order to ascertain the effect of trade reforms on the export performance of coir and coir products. Owing to these changes, Kerala, where the industry was established and has had a long-standing monopoly, is also included in the research.

Coir Industry Growth

The production of coir was among the first industries in India. The most important coconut-producing states in the nation are Maharashtra, Karnataka, Andhra Pradesh, Kerala, and Tamil Nadu, in addition to Goa, Assam, Orissa, Andaman & Nicobar, Pondicherry, and Lakshadweep. The states of Andaman & Nicobar, Goa, and Goa are also coconut-producing states. India is the world's biggest producer of coconuts, accounting for almost two thirds of global production of coir and products produced from it. It is this country, together with its neighbor Sri Lanka, that produces over 90 percent of the coir fiber used worldwide. The yearly output of coir fiber in India is around 280000 metric tons (MT).

The coir industry in the country employs more than 5.5 lakh people (0.55 million). Kerala produces the majority of coir and coir-derived goods in India, making up over 61% of the country's total coconut output. In the country's rural economy, the sector offers a steady source of employment, especially for women.

The goals

  • To research how India's coir industry has developed

  • To research trade liberalization and the coir industry's export performance

  • Examine the Coir Industry Agreement on Textiles and Apparel.

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