India's garment exports have increased quite rapidly in terms of U.S. dollars in recent years. But other Asian exporters have done better. Certain policy-induced structural features of the Indian garment industry have created inefficiencies in the areas of export marketing, production and import supplies. This paper analyses some of these and suggests a few remedies. The paper argues that policy should enable and encourage large firms to play a more active role in garment exports. This will allow India to exploit the high-volume segments of the world market more fully and appropriate a higher share of the value addition in the export chain. The paper proposes some measures for making the institutional arrangements for production and input supplies more efficient, so that exporters may capitalise on India's comparative advantages and bypass disadvantages. The question of developing constructive linkages between large and small firms is also dealt with in this context.