Potential for India’s Entry into Factory Asia: Some Casual Findings from International Trade Data

Mitsuyo Ando, Kenta Yamanouchi and Fukunari Kimura
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Mitsuyo Ando: Keio University, Japan
Kenta Yamanouchi: Kagawa University, Japan

No DP-2021-14, Working Papers from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: Despite its impressive economic growth in the past few decades, India is slow in adopting a task-by-task international division of labour or international production networks (IPNs). Using international trade data for international comparison from multiple angles, this paper visualises the position of India – particularly in machinery IPNs and information and communication technology (ICT) services. Although machinery industries are at the centre of IPNs in East Asia, the paper clearly visualises that India has not yet participated in Factory Asia. Rather, trade data indicate that India is still engaged in import-substituting industrialisation. The paper also argues that ICT services are a strength for the Indian economy, and its competitiveness could be utilised effectively by combining new technologies with traditional industries such as manufacturing. India still has huge potential for utilising the mechanics of a new international division of labour to accelerate economic growth, innovation, and poverty alleviation.

Keywords: International production networks; unbundling; machinery; global value chain (GVC) participation; gravity equation (search for similar items in EconPapers)
JEL-codes: F14 F68 O53 (search for similar items in EconPapers)
Date: 2021-06-30
New Economics Papers: this item is included in nep-ict, nep-int, nep-isf and nep-sea
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