Question

In what ways has competition affected workers, Indian exporters and foreign MNCs in the garment industry?

Answer 1

1. Job Security: Workers have lost their permanent jobs. Faced with increasing competition, most firms choose to hire workers ‘flexibly’. It indicates that jobs are no longer secure. Workers are paid poor wages and must labour long hours. Workers are denied a fair share of benefits.
2. Cost-cutting: To remain competitive, India’s exporters work hard to reduce production costs. This intense competition forces exporters to offer competitive prices, which reduces their profit margins. Because raw material costs cannot be reduced, exporters attempt to minimise labour expenses by hiring workers on a temporary basis and forcing them to work extremely long hours during peak season.
3. Maximizing profit: MNCs in Europe and America source their products from Indian exporters. They look for the cheapest things to increase revenues. While competition helps multinational corporations to make significant profits, it frequently comes at the expense of employees and small firms.