Indian Electronics Industry’s FDI-Led GVC Engagement: Theoretical and Policy Insights from a Firm-Level Analysis

Smitha Francis () and Murali Kallummal
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Smitha Francis: Consultant, Institute for Studies in Industrial Development (ISID)
Murali Kallummal: Professor, Centre for WTO Studies

Chapter Chapter 5 in India’s Economy and Society, 2021, pp 97-124 from Springer

Abstract: Abstract The electronics industry—the hardware core of the digital economy—is strategic for any country because of the rapid expansion in the adoption of digital technologies across sectors. Several policy reforms have been carried out by successive governments to attract FDI and to promote global value chain (GVC) engagement by Indian electronics firms, with a view to upgrade their technological capabilities and to increase electronics exports from India. Against this backdrop, the present paper seeks to analyse the nature of FDI-driven engagement of Indian electronics firms in industry value chains. Based on a critique of the existing approaches for examining GVC participation based on intra-industry trade (IIT) or trade in value added (TiVA), the paper presents an alternative methodological approach and examines the nature of value chain participation of foreign-owned firms through an analysis using firm-level data. Analysis of the value chain engagement of a large FDI-recipient Indian electronics firm is carried out using this methodology. This analytical framework relates macro policy aspects of trade and FDI liberalisation and industry-specific policies with firm-level business strategies, to understand the impact of policies on the nature of an industry’s FDI-led GVC engagement and its implications for the industry’s development trajectory.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isbchp:978-981-16-0869-8_5

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DOI: 10.1007/978-981-16-0869-8_5

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