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The Anatomy of Value Creation: Input-Output Linkages, Policy Shifts, and Economic Impact in India's Mobile Phone GVC

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  • Sourish Dutta

Abstract

This paper examines the economic impact of India's involvement in mobile phone manufacturing in the Global Value Chain (GVC), which is marked by rapid growth and significant policy attention. We specifically quantify the domestic value added, employment generation (direct and indirect, disaggregated by skill and gender), and evidence of upgrading, considering the influence of recent policy shifts. Methodologically, this study pioneers the construction and application of highly disaggregated (7-digit NPCMS) annual Supply-Use Tables (SUTs) and symmetric Input-Output Tables (IOTs) for the Indian manufacturing sector. These tables are derived from plant-level microdata from the Annual Survey of Industries (ASI) from 2016-17 to 2022-23. Applying the Leontief Input-Output framework, we trace inter-sectoral linkages and decompose economic impacts. Our findings reveal a significant expansion in Domestic Value Added (DVA) within the mobile phone sector, with indirect DVA growing exceptionally, indicating a substantial deepening of domestic backward linkages. This sector has become a significant employment generator, supporting over a million direct and indirect jobs on average between 2019-20 and 2022-23, with a notable surge in export-linked employment and increased female participation, alongside a rise in contractual labour. This paper contributes granular, firm-level, data-driven evidence to the debate on the benefits of GVC participation, particularly for economies engaged in assembly-led manufacturing. The results suggest that strategic policy interventions that foster scale and export competitiveness can significantly enhance domestic economic gains, even in the presence of initial import dependencies. The findings provide critical insights for policymakers seeking to maximise value capture and promote sustainable industrial development through deeper Global Value Chain (GVC) integration.

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  • Sourish Dutta, 2025. "The Anatomy of Value Creation: Input-Output Linkages, Policy Shifts, and Economic Impact in India's Mobile Phone GVC," Papers 2506.13936, arXiv.org, revised Jun 2025.
    • Handle: RePEc:arx:papers:2506.13936
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