Some reflections on textile demand

Abstract

In both the Indian urban and the rural sectors, the demand for cotton textiles has not only been relatively stagnant, but the top 10 per cent of the population in terms of purchasing power has been raising its share of total expenditure on clothing at the expense of the poorer sections. While until 1973 the demand for finer varieties of cloth grew rapidly and that for coarse and medium varieties shrank, since the mid-70s competition from blended and synthetic fabrics and from the decentralized sector have hit all varieties of mill-made cotton cloth. Estimates of price elasticities of cloth and foodgrains indicate that it may be possible to stimulate cotton textile demand by reducing the margins on mill-made cloth. This would require some restructuring of the mill cloth distribution system.