Amplifying India's Role in International Production Networks: Undertakings and Future Opportunities
India is poised to strengthen its position in the global economy by deepening its integration into Global Value Chains (GVCs), a move that could transform the country from an assembler of goods to a producer of high-value products.
Currently, India's GVC integration is hampered by infrastructure bottlenecks, regulatory complexities, and high trade costs. To overcome these challenges, the focus should be on speeding up industrial infrastructure projects, reducing regulatory complexities, and improving trade logistics.
The Federation of Indian Chambers of Commerce and Industry (FICCI) plays a pivotal role in strengthening India's participation in GVCs. FICCI was instrumental in organising the "National Workshop on Global Value Chains: India's Potential and Prospects".
Higher investments in Research and Development (R&D) are essential to foster innovation and develop new technologies that can contribute to value creation. CII has emphasised the need for a well-designed industrial policy that prioritises domestic value addition over mere assembly.
India's large domestic market, growing digital infrastructure, and government initiatives provide a strong foundation for expanding its role in GVCs. However, countries like Vietnam, Bangladesh, and Mexico offer lower labor costs and more favorable trade agreements compared to India.
The future prospects for India's GVC participation are promising, particularly as global companies seek to diversify their supply chains. Continued collaboration between policymakers, industry leaders, and organisations like CII will be crucial for driving reforms, fostering innovation, and improving India's competitiveness in global supply chains.
Such a policy would encourage Indian firms to produce more components locally, reducing dependency on imports and improving their competitiveness in global markets. Deepening India's integration into GVCs could spur sustainable economic growth, create more jobs, and enhance India's global competitiveness.
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