How India fits into global production sharing: Experience, prospects and policy options

Prema-chandra Athukorala

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: Global production sharing—the break-up of the production process into geographically separated stages—is an increasingly important facet of economic globalization that opens up opportunities for countries to specialize in different slices (tasks) of the production process depending on their relative cost advantage. 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 than for promoting the standard labour 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 (MNEs) engaged in global production networks.

Keywords: global production sharing; production fragmentation; foreign direct investment; export performance (search for similar items in EconPapers)
JEL-codes: F21 F23 F53 O33 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2013
New Economics Papers: this item is included in nep-sea
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Citations: View citations in EconPapers (12)

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Journal Article: How India Fits into Global Production Sharing: Experience, Prospects, and Policy Options (2014)
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