Enhancing India's Presence in International Production and Trade Networks (Global Value Chains): Planned Actions and Future Possibilities
India is poised to enhance its role in global value chains (GVCs), according to the Confederation of Indian Industry (CII). This transformation from an assembler of goods to a producer of high-value products could significantly boost India's global competitiveness, drive sustainable economic growth, and create more job opportunities.
The CII plays a pivotal role in developing an industrial policy strategy. The focus is on promoting local value addition beyond mere assembly, facilitating capacity building, innovation, and investment in manufacturing processes within the industry. Higher investments in research and development (R&D) are essential to foster innovation and develop new technologies that can contribute to value creation.
India's large domestic market, growing digital infrastructure, and government initiatives provide a strong foundation for expanding its role in GVCs. However, challenges persist. Infrastructure bottlenecks, regulatory complexities, and high trade costs are obstacles that need to be addressed.
To overcome these hurdles, India needs to speed up the execution of industrial infrastructure projects, reduce regulatory complexities, and improve trade logistics. This will help India compete with countries like Vietnam, Bangladesh, and Mexico, which offer lower labor costs and more favorable trade agreements.
The future prospects for India's GVC participation are promising, particularly as global companies seek to diversify their 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.
Continued collaboration between policymakers, industry leaders, and organizations like CII will be crucial for driving reforms, fostering innovation, and improving India's competitiveness in global supply chains. By addressing the challenges and leveraging its strengths, India can transform its economy and secure a prominent place in the global market.
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