Abstract
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. JEL Classification: O14, O33, C14
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