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Trade
Safeguarding strategic interests with development finance? India's response to China's expanding footprint in the Global South
Studies have suggested that both India and China use grants and concessional loans as a means to gain favour with developing countries. Using 2007-2014 data on development projects implemented by the two economies, this article shows that India tends to make financial commitments and increase its local presence as a response to China’s development activities, in order to compete for commercial influence.
Global supply chain disruptions: Causes and the way ahead
The impact of the Covid-19 pandemic has been disastrous for the global supply chains, with persistent effects since early 2020, and knock-on effects now gaining intensity. In this post, Sharmila Kantha discusses the factors responsible for supply chain disruptions, the global impact of the crisis, and the ways in which India – and the world – and private businesses can navigate the situation to build long-term resilience against similar crises.
Current state of play in India’s services trade
Since the 1990s liberalisation reforms, the services sector has been seen as a key driver of India’s economy. Against the backdrop of the WTO Ministerial Conference, Anil Kumar Kanungo examines the current state of India’s services trade – India’s participation in multilateral trade organisations and agreements, barriers to services trade, and opportunities and prospects for growth.
Global value chain participation and intermediate export sophistication
While the dominance of global value chains (GVCs) in production processes is a widely accepted fact, the impact of participation in GVCs is still being explored. Using data from a sample of 100 nations for 1999-2018, this article examines the improvement in productivity brought about by GVC participation, and its role in the upgradation of intermediate exports – the main channel through which countries participate in GVCs.
India’s trade protectionism and low-productivity vicious cycle
Amid rising populism and anti-globalisation movements across the world, Atmanirbhar Bharat represents India’s adoption of trade protectionism. While the country’s inward-oriented economic policies tend to be viewed with a predominantly ideological lens, Srijan Shukla presents an alternate political economy framework, which attributes the underlying protectionist tendencies to a vicious cycle of low productivity.
Leveraging global supply chains to fight Covid-19
When the second wave of Covid-19 hit India, the health catastrophe was compounded by shortages of oxygen, medical equipment, and life-saving drugs. In this post, C Veeramani and Anwesha Basu contend that contrary to the Indian government’s Atmanirbhar or self-reliance stance, relying on global supply chains is a better strategy to achieve resilience against unexpected health shocks.
Boosting India’s capital goods’ exports
Union budget 2021-22 has proposed a sharp 34.5% hike in capital expenditure, which is expected to boost the capital goods sector. While the sector has grown since liberalisation, its share in the global export market is under 1%, and there is heavy dependence on imports. Analysing trade data for the sector from 2008-09–2018-19, this article suggests that India has not been able to fully leverage free trade agreements due to non-tariff barriers and low competitiveness.
Import competition, formalisation, and role of contract workers
Given the recent expansion in the participation of developing countries in global trade, it is important to understand the role of trade in the composition of employment in these countries. Analysing the case of Indian manufacturing and Chinese imports, this article shows that import competition leads to an increase in the share of formal-sector employment – driven by greater usage of contract workers in the formal sector – and higher aggregate labour productivity.
Trade disruption, industrialisation, and how the sun set on British rule in India
It is argued that by keeping India open to imports of cheap British manufactures, the imperial power made it excessively difficult for Indian industry to emerge in the early 20th century. This article examines this by studying the impact of World War I-related drop in net imports from Britain during 1913-1917 on Indian industrialisation. It finds that the protection offered by this trade shock had a positive effect on Indian industry, and that 24% of industrial employment growth in this period can be attributed to it.
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