Global value chains (GVCs) are fraught with the phenomenon of fragmentation and dispersion of production across the world. India presents a unique example with its high potential in manufacturing capability but low integration in GVCs. This book examines the reasons why India has failed to integrate within GVCs so far and looks at key examples to understand the impediments in this process. The chapters bring together case studies from across the manufacturing industry – labour-intensive (garment, paper and diamond), capital-intensive (automobile and petrochemical), and knowledge-intensive (semi-conductor microchip, chemical and pharmaceutical) sectors. Together, they present stories of successful integration of some firms in GVCs as well as the difficulties faced by them. The volume also highlights the importance of GVCs in the context of developing countries in terms of benefits such as income and value generation, knowledge and technology collaborations, and advances in systems and processes.
This book will interest scholars and researchers in economics, international trade studies, development economics and business management as well as to practitioners, policymakers, government officials, and those in the corporate sector.
‘Effective participation in the Global Value Chains is indeed one of the most missing elements of India’s international trade. We started at independence as an inward-looking country with emphasis on 'import substitution' as the primary goal conserving foreign exchange to import the only the most essential goods. This licence permit raj of management had reached its limits and we ended up promoting inefficiencies, poor quality and high costs through this protectionism. We moved to the next phase in 1991 effectively opening up trade with 'export promotion' replacing our earlier policy of 'import substitution'.
But so far as being part of an international chain of value addition, thus, importing raw materials or intermediate goods and re-exporting them after processing is concerned, we have miles to go. Schemes such as SEZs, EOUs, EPCG, Advance Authorisation schemes are steps in this direction. However, we have not become a major player in the Global Value Chains. The reasons for this situation are much more than mere EXIM policies or Customs procedures. The entire range of issues which the participating organisations have to deal with including infrastructure, finance, time taken to clear the goods, transport them to the factories and to re-export them need to be looked at. This book precisely and wonderfully does that. It is absolutely opportune that such a study is made at this time in the country.
In addition to identifying the problems in general, it is important to study specific industries and their problems and issues if the studies have to be meaningful and this is the second biggest contribution of the book. I am confident that the book will be extremely useful for policymakers, practitioners, researchers and trade alike and it will encourage others to conduct more studies covering a larger number of industries.’
P. V. Subba Rao, IRS (C&CE), Joint Secretary (COFEPOSA), Department of Revenue, Ministry of Finance, Government of India
‘This book is an empirically rich analysis of the reasons for India's poor integration in global value chains (GVCs). The book also looks at what can be done to increase India's benefits from participation and upgrading in GVCs. Its analysis and conclusions should be of interest to both researchers and policymakers.’
Dev Nathan, Visiting Professor, Institute for Human Development, New Delhi; Coordinator, GPN Studies, New Delhi; and Visiting Research Fellow, Center on Globalization, Governance and Competitiveness, Duke University, USA.
List of Figures
List of Tables
List of Abbreviations
Part I: Concepts and Framework
Part II: Evidence of India’s Integration
2. Why is GVC Engagement Limited for Some Countries?
3. Conceptual Framework for the Book
4. Evidence of India’s Integration into GVCs
5. Integration of Developing Countries in GVCs and the Case of India: Survey Findings
Part III: Integration across Sectors
6. Integration in the Automobile Value Chain: The Case of India
7. India in the Chemical GVCs
8. Integration in the Petrochemicals Sector in India
9. Integration in the Pharmaceutical Value Chain: The Case of Formulations in India
10. Integration in the Semiconductor Microchip Node in India
11. Integration in the Garments Value Chain: The Case of India
12. Integration in the Specialty Chemicals Value Chain: The Case of India
Part IV: Conclusion and Policy Implications
13. Sectors that Hold Promise