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How India Fits into Global Production Sharing: Experience, Prospects, and Policy Options

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  • Athukorala, Prema-chandra

Abstract

Global production sharing—the breakup of the production processes into separate stages, with each country specializing in a particular stage of the production sequence—is a phenomenon of major significance that is increasingly manifesting itself in patterns of global production and trade. This paper examines India’s role in global production sharing from a comparative East Asian perspective in order to contribute to the contemporary policy debate in India on the link between export performance and “jobless growth” in domestic manufacturing in India. The analysis reveals that India has so far failed fitting into global production networks in electronics and electrical goods, which have been the prime movers of export dynamism in China and the other high-performing East Asian countries. Further reforms to improve the overall investment climate is even more important for reaping gains from this new form of international exchange compared to the standard labor intensive exports. There is also a strong case, based on the experiences in East Asia and elsewhere, for combining further reforms with a proactive investment promotion campaign to attract multinational enterprises engaged in global production networks.

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  • Athukorala, Prema-chandra, 2014. "How India Fits into Global Production Sharing: Experience, Prospects, and Policy Options," India Policy Forum, National Council of Applied Economic Research, vol. 10(1), pages 57-116.
    • Handle: RePEc:nca:ncaerj:v:10:y:2014:i:2014-1:p:57-116
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    1. Prema-chandra Athukorala & C. Veeramani, 2019. "From Import Substitution to Integration into Global Production Networks: The Case of the Indian Automobile Industry," Asian Development Review, MIT Press, vol. 36(2), pages 72-99, September.
    2. Choorikkad Veeramani & Lakshmi Aerath & Prachi Gupta, 2018. "Intensive and extensive margins of exports: What can India learn from China?," The World Economy, Wiley Blackwell, vol. 41(5), pages 1196-1222, May.
    3. C. Veeramani, 2019. "Fragmentation Trade and Vertical Specialisation: How Does South Asia Compare with China," Journal of Asian Economic Integration, , vol. 1(1), pages 97-128, April.
    4. Prema‐chandra Athukorala, 2019. "Joining Global Production Networks: Experience and Prospects of India," Asian Economic Policy Review, Japan Center for Economic Research, vol. 14(1), pages 123-143, January.
    5. C. Veeramani & Prachi Gupta, 2014. "Extensive and Intensive Margins of India's Exports: Comparison with China," Working Papers id:5808, eSocialSciences.
    6. Prema-chandra Athukorala & C. Veeramani, 2017. "Internationalization of Indian Enterprises: Patterns, Determinants, and Policy Issues," Asian Economic Papers, MIT Press, vol. 16(1), pages 142-166, Winter/Sp.
    7. Sakshi Aggarwal & Debashis Chakraborty, 2020. "Is there any relationship between Marginal Intra-Industry Trade and Employment Change? Evidence from Indian Industries," Working Papers 2044, Indian Institute of Foreign Trade.
    8. Neha Gupta, 2016. "Domestic Value-added Growth is Vital," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(2), pages 271-294, September.
    9. Prema-chandra Athukorala, 2017. "Manufacturing exports from Sri Lanka: opportunities, achievements and policy options," Departmental Working Papers 2017-03, The Australian National University, Arndt-Corden Department of Economics.
    10. Prema-chandra Athukorala, 2017. "India’s Long Road: The Search for Prosperity by Vijay Joshi Oxford University Press, Oxford, 2016 Pp. xi + 345. ISBN 978 0 19 061013 5," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 31(2), pages 137-145, November.
    11. Saon Ray & Smita Miglani, 2016. "Innovation (and Upgrading) in the Automobile Industry: The Case of India," Working Papers id:10794, eSocialSciences.
    12. Sadhana Srivastava & Rahul Sen, 2015. "Production fragmentation in trade of manufactured goods in India: prospects and challenges," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 22(1), pages 33-66, June.
    13. Nidhi Bagaria, 2022. "Analysing Opportunities for India in Global Value Chains in Post COVID-19 Era," Foreign Trade Review, , vol. 57(3), pages 261-282, August.
    14. Purna Banerjee & C. Veeramani, 2015. "Trade liberalisation and women's employment intensity: Analysis of India's manufacturing industries," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2015-018, Indira Gandhi Institute of Development Research, Mumbai, India.

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    More about this item

    Keywords

    Global Production Sharing; Production Fragmentation; Foreign Direct Investment; Export Performance;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • J8 - Labor and Demographic Economics - - Labor Standards
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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