Measurement of Technological Change in India's Textile Machinery Industry Using the Malmquist Productivity Index

This article measures technological change in India's textile machinery industry, and examines how user-producer interaction affects this. Employing the non-parametric Malmquist productivity index, we find there has been little technological change in the textile machinery industry from 1998-99 through 2007-08. It is proposed that poor and unsustainable demand and the shrinking share of domestic demand for textile machinery owing to the technological upgradation fund scheme-meant for providing interest reimbursements or capital subsidies to textile manufacturers-may have weakened the user-producer interactions, thereby bringing down innovative activities and innovations in the textile machinery industry in India.