Trade Liberalisation, Capital-Intensive Export and Informalisation: A Case Study of India’s Manufacturing Sector

Sonal Ann D’souza () and Panchendra K. Naik ()
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Sonal Ann D’souza: JNU
Panchendra K. Naik: Centre for Development Studies (CDS)

The Indian Journal of Labour Economics, 2018, vol. 61, issue 2, No 8, 377-399

Abstract: Abstract There has been widespread concern among the academicians regarding the changing composition of trade in the aftermath Washington Consensus regime, which enforced the structural adjustment programme among developing economies. The policy mantra of the regime was rested on “stabilize, privatize, and liberalize”—give market free rein strategy. Since then, there has been a systematic shift in developing economies’ trade basket towards capital- and skill-intensive products, and India was no exception. In this study, we have made an attempt to understand the changing dynamics of India’s manufacturing trade under the liberalised regime. In the last couple of decades, the country’s manufacturing export basket had shown rapid changes towards capital- and skill-intensive goods. These changes are, however, understood as India’s failure to specialise in its comparative advantage. Under the new global production structure, this poses a serious threat to the country as this marked shift has not resulted in labour absorption. This has further abetted the process of informalisation—as we noticed more employment across the export-led industries gradually shifting towards the unorganised informal sector. The growing informalisation of the economy should be understood from the prism of global production structure that uses cheap labour from developing economies by infusing a dangerous obsession for competition.

Keywords: Liberalisation; Global production structure; Manufacturing sector; Manufacturing trade; Informalisation; Employment (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s41027-018-0136-1

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