Globalisation of textile trade in the post MFA period and its impact on environment standards: case study of Tirupur textile processing units

Abstract

Trade growth for a relatively poor country is thought to shift the composition of industrial output towards dirtier products, aggravating environmental damage. India s rapidly growing textile trade and serious environmental degradation appear to be no exception. The trade growth could be cleaner, if production occurs in cleaner goods, or industries specialises in cleaner stages of production. Using data obtained from Tirupur Textiles Processing units, I present evidence that Tirupur Textile Processing has become cleaner over time while witnessing increase in international trade. The effluents discharged by the Tirupur Processing units since 2005 have declined, inspite of increase in the manufacturing output. As per the theory, this improvement must result from one of the two trends, viz., 1) changes in production or abatement process (technology) or 2) changes in the mix of goods manufactured. In this paper, I establish that the decline in pollution in the discharges of Tirupur processing units has been result of changing technology rather than changes in the mix of goods produced, Further, the pace of the technology change was swift during the last 3 years since 2007.Then I explore the reasons towards cleaner trade. The regulatory role assumed by the higher courts in making the textile processing units to adopt cleaner technology is the most important factor attributed by the industry to move towards cleaner technology. Data obtained from the textile processing units at Tirupur support the view that regulatory role assumed by the courts has contributed positively to the decline in the pollution intensity of textile processing.