Joining Global Production Networks: Experience and Prospects of India

Abstract

Cross-border dispersion of different stages/slices of the production processes within vertically integrated global industries (“global production sharing”) has been a key structural change in the global economy in recent decades. This paper examines India's experience with exploiting opportunities created by this phenomenon for export expansion from a comparative East Asian perspective. The analysis reveals that India has so far failed fitting into global production networks in electronics and electrical goods, which have been the prime movers of export dynamism in China and the other high-performing East Asian countries. The findings of this study provide further support to the case for completing the unfinished reform agenda, encompassing both trade and investment policy reforms, and “behind-the-border” reforms. There is also a strong case, based on the experiences in East Asia and elsewhere, for combining further reforms with a proactive investment promotion campaign to attract multinational enterprises engaged in global production networks.