Question

Recently it was reported that the Indian textile sector was not doing well. If the ideas contained in the passage are agreed to, then which of the following could be a possible reason?

1. All Indian firms are as old as international firms.
2. Indian textile firms are dispersed all over the country, with most of them also having an international presence.
3. Textile firms in India were subjected to trade union activity in the period from the 1960s to the 1980s.

• A. 1
• B. 2
• C. 3
• D. 1 and 2

Hint:

Ask which fact would actually drag performance down over decades, not which fact is merely neutral or would normally help a firm.

Answer 1

The Correct Option is C

We need a fact that could genuinely explain why the Indian textile sector has been struggling.

1. All Indian firms are as old as international firms: age alone says nothing about performance. A firm's vintage does not, by itself, explain why an entire sector would be doing poorly, so this fact does not answer the question.
2. Indian textile firms are dispersed across the country, many with an international presence: being spread out and having a foreign footprint are usually strengths, they widen a firm's market and reduce its dependence on any one region. This would help performance, not hurt it, so it cannot explain a decline.
3. Textile firms faced trade union activity from the 1960s to the 1980s: sustained labour unrest over two decades means frequent strikes, lost production days, and reluctance to invest in new machinery. Costs rise, output falls, and the sector loses ground to competitors who did not face the same disruption. This is a direct, well known cause of long term decline.

Only the trade union history plausibly explains the sector's poor performance, so the answer is "3".

Let's summarize:

• A cause of decline must actually work against performance, not sit neutral or help it.
• Long spells of labour unrest are a classic, well documented drag on an industry's competitiveness.

So the correct choice is option C, "3".