Through the Tariff Reform Program, the textile industry has exhibited a significant progress in its efficiency despite lower effective protection. Effective protection rate and domestic resource, which are derived from legal tariffs and taxes, are analyzed in relation to the presence of smuggling, import restrictions and the balance of payments crisis in 1984. However, due to widespread smuggling in the industry, EPR and DRC is recalculated using direct price comparison. Evaluation of the two computations indicates lower values when the latter is in place. Hence, it has been argued that the removal of monopoly on the input side and the liberalization of importation of major textile raw materials are necessary.