Skip to main content

Experts regret: India's participation in global value chain 'stagnated' since 2008

By Arjun Kumar 

A #WebPolicyTalk on Global Value Chain (GVC) and participation in it of the Indian economy, organized under the series of ‘The State of Foreign Trade- #Talking Trade and by the Centre for Finance and Economics, Impact and Policy Research Institute (IMPRI), New Delhi, saw Prof Takahiro Sato sought to highlight the role of the Indian manufacturing industries and their place it GVC, even as seeking to contrast it with the economies of China and ASEAN countries.
The chair of the session, Mukul Asher, former professor, Lee Kuan Yew School of Public Policy, National University of Singapore, opened the floor, speaking of how the economy is changing from being liberal into a more fragmented form of economy and understanding the role of GVC during these changing times is absolutely necessary.
Takahiro Sato, who is professor, Research Institute for Economics and Business Administration (RIEB), Kobe University, Japan, gave a presentation in order to highlight how important the role of GVC is in the economic development of developing countries.
The firms that have enhanced themselves to be a part of GVC should take advantage of equipping themselves with the latest technologies and management practices to increase productivity, said, citing the examples of Toyota, Nike and TCS to discuss the relevance of GVC as a concept before highlighting the role of India in this specific context.
Elaborating on the flow of events in the global value chains, he took the example of the assembly of the Boeing 787 and showed that various levels are outsourced to different countries. Referring to his study, he highlighted how his findings were reached using data of both import and export activities of the country, specifically focusing on pure backward participation and two-sided participation.

India’s participation in GVC

He described how, in general, India’s GVC is low in comparison to the global standards but has relatively higher GVC in the area of mining, petroleum, chemical, and non-metal industries. He pointed out that from 1990 to the global recession of 2008, the degree of India’s participation in the GVC’s had been increasing. Since the global recession, GVC participation has stagnated, except that of metallic industries.
He emphasized how the existing studies in India specifically regarding this topic have maintained a bias for IT and pharmaceutical studies and there is a gap in the literature regarding the domestic value chain. Sectors such as oil refining still don’t have adequate literature to address it.
Prof Dev Nathan, economist, research director, GenDev Centre for Research and Innovation, Gurgaon, explained why the need for specialization was important. Increasing competency, sub-contracting and outsourcing is what will add value to GVC, which should be undertaken by India.
He stated that some of the international GVCs have a better approach than the domestic value chain, pointing towards the garment industry research, which was conducted by him on how the traders often find it difficult to navigate around getting reimbursements of goods and services tax (GST) from the government.
He said that the knowledge base of the different stages of the value chain is often controlled and kept away, especially through the utilization of intellectual property laws, thus making branding and marketing a more difficult stage to achieve than the manufacturing stage. The buyers’ and sellers’ comparative profit was also discussed by him in detail.

Domestic market and institutions

Amita Batra, professor, Centre for South Asian Studies, School of International Studies, Jawaharlal Nehru University (JNU), New Delhi, highlighted the role of the domestic value chain and how comparing the domestic and the international spheres value chains are distinctively different. She spoke about the capacity of doing smaller tasks and the performance of those specific skills is leading to enhancement within the domestic market.
She questioned the idea of how the performance by different countries entails the notion that different economies and institutions in place in terms of policy function differently, highlighting how the ASEAN countries have remained pro-active but not China, calling for a nuanced analysis of the countries.
She pointed out that the garment industry has adequate literature as it was the integrating factor for India to merge itself within the global economy. She wondered if India has increased its involvement in the manufacturing sector and if the wage increase marks with itself some degree of increment in levels of competency and skills, which should be introspected upon. She spoke about how important inter-trade agreements are and interregional cooperation is absolutely necessary for the benefit of the growth of the Indian economy.
Concluding, Dr Nalin Bharati, associate professor, Humanities and Social Sciences, Indian Institute of Technology (IIT), Patna, highlighted how important it is that India’s potential is fostered with an adequate measure for the country to thrive.
In terms of production, where the low cost of production can be cut by being not simply on the receiving end of providing services but the outsourcing country should also become an important knowledge hub by owning more intellectual property and upskilling of its people which will enhance the economy along with the betterment of the manufacturing sector.
---
*Director, IMPRI. Acknowledgment: Srimoyee Biswas, research intern at IMPRI

Comments

TRENDING

Tracing roots of Hindutva Zionism: cannon fodder for 'warped' nationalist pretensions

By Shamsul Islam*  Those who believe in a world free of hegemonic ethno-nationalism, racism, religious bigotry and hatred have rightly taken note of Zionism and its ally Christian Zionism, major perpetrators of ethnic cleansing of ‘Others’. However, the civilized world with its core belief in multi-culturalism and peaceful co-existence is oblivious to a no less dangerous threat to the present human civilization: the Hindutva Zionism. As the term reads it is part of the Hindutva world-view which stands for an exclusive Hindu India minus Muslims and Christians. The other religions like Sikhism, Buddhism, and Jainism will have no independent status but treated as part of Hinduism. The Rashtriya Swayamsevak Sangh (RSS; National Volunteer Organization) is the most prominent flag-bearer of the Hindutva politics whose cadres presently rule India, the largest democracy in the world. RSS was founded by Keshav Baliram Hedgewar (1889-1940) in 1925 who was disillusioned with the Indian freedom st

'Blatant violation' of law by Central government in making NREGA payments

By Our Representative  In September third week, NREGA workers across the country were mobilised for two day so raise their issues and submit a memorandum to the Prime Minister. Organised the NREGA Sangharsh Morcha (NSM), a collective of groups that work with NREGA labourers across the country, workers from 13 states -- Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Telangana, Uttar Pradesh and West Bengal -- carried out Kaam Do Abhiyaan, staging demonstrations and rallies against what they called blatant violation of law by the Central government in making NREGA payments. While NREGA has had very positive impacts, it has lately become fruitless, exploiting labour, even though workers who have put in honest hard work have to wait for their wages endlessly, it was suggested.  In such a situation, there is a need to firm up NREGA implementation and end systematic corruption to ensure that workers get their basic NREGA entit

Shocking? No Covid vaccine trials conducted on pregnant, lactating women: RTI reply

By Rosamma Thomas*  A Right to Information applicant who sought details of safety trials conducted in India on pregnant and lactating women for three Covid vaccines in use in India – Covishield, Covaxin and ZyCov-D -- was shocked to learn from the Central Drugs Standard Control Organization (CDSCO) that Serum Institute, manufacturer of Covishield, and Cadila Healthcare, manufacturer of the ZyCov-D vaccine, had not sought permission for such trials.  Bharat Biotech, manufacturer of Covaxin, had sought permission for trial on pregnant women and later withdrawn its application. This response , provided after the applicant was initially unsatisfied with the response and went in appeal, is from the joint drugs controller, CDSCO. It was dated September 13, 2022. One researcher closely following the vaccine rollout, however, is of the opinion that the lack of a trial on pregnant and lactating women is a blessing; potential trial participants and their unborn babies thus escaped harm. Aruna Ro

Fascism on prowl? Religious meet 'deeply pained' at silence of Church, bishops, priests

Counterview Desk  The ‘Forum of Religious for Justice and Peace’which held its 17th National Convention at the Montfort Social Institute, Hyderabad, Telangana from 22 to 24 September 2022 on the theme “Deepening our Identity as Religious: Responding to the Signs of the Times”, has expressed concern “at the deteriorating situation of our nation on every front”, especially stating, “Fascism seems to have come to stay” in India. At the same time, the convention, which took place with the participation of 60 persons from 16 states representing 20 religious congregations, in its unanimously-adopted statement added, “We have reached abysmal depths on every parameter: be it social, economic and political”, underlining, “The poor in India become poorer every day; the rich and powerful continue to profiteer at their expense and amass scandalous amounts of wealth.” Text: We, members (63 women and men Religious, from 16 states representing 20 Congregations) of the Forum of Religious for Justice

Rajasthan cops 'halt' Gujarat Dalit women's rally: homage to untouchability victim boy

By Our Representative  In a surprise move, the Rajasthan police stopped a Dalit women's rally from Gujarat on the borders after it crossed Gujarat alleging that it would "disturb peace" in village Surana, Jalore district, where the gruesome incident of death of a Dalit boy took place on August 13 after he was brutally beaten up by his teacher on touching the drinking water pot. Sources said, while the Gujarat government had "no objection" in allowing the rally, which originated from the Dalit Shakti Kendra (DSK), an empowerment-cut-technical institute for teens founded by human rights leader Martin Macwan, on September 24 morning, the Rajasthan police stopped it for two and a half hours before allowing it to proceed to Surana. The decision to take out a women's rally was taken at a DSK meeting on September 5 following a condolence meeting of the NGO Navsarjan Trust, also founded by Macwan, activists committed to work against caste-based discrimination, orga

Introducing non-native cheetahs is 'not equivalent' to restoring pride in the nation

By Bappaditya Mukhopadhyay*  The Cheetahs from the African continent has finally been introduced to India by the Indian Prime Minister on his 72nd birthday. The process had started with the previous Government in 2009. However, the Supreme Court clearance was pending owing to the objection by the National Tiger Conservation Authority (NTCA) plea to reintroduce cheetahs. Finally the clearance was obtained in January 2020 and thereafter Kuno National Park (KNP) was chosen for the reintroduction of first set of Southeast African Cheetahs. In the near future, depending upon the success story of the current reintroduction, more cheetahs from South Africa may also be introduced. This exercise has generated a lot of interest among various stakeholders with opinions on both sides galore. It is important to pose some questions that surround the whole exercise. Let us evaluate some of these arguments. The first set of arguments are quite detached from the issues of conservation as they most

'Military diplomacy': US praises Bangladesh Army for leadership role in UN operations

By Kamal Uddin Mazumder* As the Indo-Pacific region represents the world’s economic and strategic center of gravity, the Indian Ocean today is becoming the centerpiece of all geo-strategic play. Cooperation in the region is crucial to implementing the international community’s global agenda, including achieving the UN’s Sustainable Development Goals. Major powers like the US have enhanced and deepened their strategic engagement and leadership roles with countries in the region. The Indo-Pacific Army Management Seminar, or IPAMS, is a U.S. Army Pacific (USARPAC) initiated conference that is aimed at facilitating and enhancing interactions among the armies of the Indo-Pacific region. This year's 46th Indo-Pacific Armies Management Seminar (IPAMS)-2022, co-hosted by the Bangladesh Army and US Army Pacific (USARPAC), concluded in Dhaka. The objective of IPAMS is to promote peace and stability in the region through mutual understanding, dialogue, and friendship. It is the largest confer

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Grave error? Scholar blames ex-Gujarat babu for anti-Christian riots 'citing fake report'

By Rajiv Shah  A few days back, I received a message from one of the finest former Gujarat government bureaucrats, PG Ramrakhiani, a 1964 batch IAS official, who retired in November 2000. I would often interact with him in 1997-99, even later, after I was sent to Gandhinagar as a Times of India man to cover Sachivalaya. Those were turbulent times. Shankarsinh Vaghela was the Gujarat chief minister, under attack from two sides – from the BJP, which he had left to form a separate breakaway party, Rashtriya Janata Party (RJP), one one hand, and the Congress, which was supporting him from outside, on the other. Ramrakhiani, in his message, referred to the book authored by Ghanshyam Shah and Jan Breman, both top-notch scholars who have known Gujarat in and out. Called “Gujarat, Cradle and Harbinger of Identity Politics: India’s Injurious Frame of Communalism”, I reviewed the book in January 2022.  It claims that Muslims in Gujarat have been turned into “new untouchables”, thanks to the Hin

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.