contributes substantially to the country’s export earnings. Its a labour intensive industry that is also quite unorganised. In January 2001, the sector was taken off from the list of industries reserved for the small scale sector and 100 per cent foreign direct investment was allowed. This has attracted global manufacturers to enter into arrangements such as joint ventures and strategic alliances with domestic companies. Industry Structure Since the industry was protected under the SSI reservation from the beginning, a large number of small units came into existence, working as contract manufacturers or job workers for the large size exporting units. This placed constraints on modernisation and limited industry’s size and competitiveness. The garment sector is characterised by both well– known national brands as well as unbranded varieties of apparels. Women’s wear forms the largest segment of the market, followed by the men’s wear segment. The third largest segment is the kids wear category. Cotton–based apparels dominate Indian exports. Delhi, Mumbai, Tirupur and Ludhiana are themajor manufacturing centres for garments. While Tirupur is famous for its cotton–based hosiery products, Ludhiana is known for its woollen knitted garments. USA and European Union are the largest markets for Indian garment exports. Indian manufacturers supply garments to a variety of international fashion houses. Indian brands by themselves do not have an international market. Though India has a cost advantage in the area of labour costs, it is perceived as being inefficient in terms of productivity. Exports andWTO Implications Until 1995, textile tradewas regulated by theMulti Fibre Agreement which enabled importing countries to impose quota restrictions on exports of individual countries. With the formation of the World Trade Organisation in January 1995, the MFA was replaced by the Agreement on Textiles and Clothing which was to be phased out over a 10–year period from 1995. Starting January 2005, the quota restrictions stand abolished. The Indian textile industry now has the opportunity to realise its full potential. Indian Industry: A Monthly Review, Centre for Monitoring Indian Economy Facts