Global Value Chain (GVC) refers to international production sharing, which is the process of breaking down production into activities and tasks that are completed in different countries.
Benefits of GVC
- Helps in building domestic companies that can compete globally
- Higher foreign exchange earnings.
- Leads to faster growth, import of skills and technology, and boost employment.
Reasons behind India’s weak GVC integration
- India has not been part of significant trade blocs for e.g.- SAARC is inactive and India has withdrawn from RCEP.
- Historical inward looking industrial policies for e.g.- license Raj, import substitution.
- The pace of re-skilling and up-skilling of the workforce is slow.
- Lack of integration with lead firms for e.g.- Bangladesh outperforms India in the garment industry due to its alignment with GVC lead firms.
Way Forward
- Streamline ports and customs operations and improve turnaround time.
- Accelerate free trade agreements with key partners.
- Ensure International Quality Standards by ensuring adherence to global standards and certification systems.
- Target High-Value specific segments such as defense, electronics, etc.
- Accelerated adoption of e-governance and e-compliance in trade.
Measures Taken for Integration with GVC
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