Make in India for the world? —a study of industrial and trade policy effects on the Indian transport equipment sector

Deeparghya Mukherjee ()
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Deeparghya Mukherjee: Indian Institute of Management Nagpur

Journal of Social and Economic Development, 2025, vol. 27, issue 2, No 4, 180-196

Abstract: Abstract Industrial and trade policies have the potential of having enmeshed effects on industries and export potential of sectors in a world of trade through integration in global value chains (GVCs). This paper takes a deeper look at the motor vehicles and transport equipment sectors of India which have been impacted by multiple government policies between 2016 and 2020. These include (a) FAME 1, (2) GST and (3) increased tariff duties on intermediates. We argue that these interventions together may have either increased or decreased exports and imports of the transport equipment sector of India. The policy changes could also have differential effects on trade in intermediates and final products as well as on India’s contribution to foreign final demand. Our empirical exercise identifies the direction of impact on trade as well as India’s trade performance with FTA partners in light of the stated policy interventions. Our results point towards India making more for the world for some segments of the transport equipment sector, but overall continuing to source significant amount of demand from abroad. The differences observed in estimation results by intermediates and finished products for different segments, including foreign value added in India, help us conclude on specific policy directions for specific segments keeping in mind the transition to electric vehicles.

Keywords: Transport equipment; GVCs; Intermediates trade; Industrial policy (search for similar items in EconPapers)
JEL-codes: F14 L52 L62 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s40847-024-00409-6

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