Unlocking the GVC Potentials in India: Role of Trade Facilitation

Global value chains (GVCs) popularly refer to international production sharing, where production is broken into activities and tasks carried out in different countries and traded globally. East and Southeast Asian countries, namely, South Korea, China, Taiwan, Thailand, Malaysia, Vietnam, etc., have successfully leveraged their open trade and investment policy to integrate into the global production networks. India, while moving in the same direction, is yet to become a major GVC-oriented economy. In other words, India’s GVC participation is still in a nascent stage and it is imperative for India to enhance its participation in GVCs. For increased integration into GVCs, a combination of initiatives linked with domestic and international policies are important. These include improvement in trade facilitation, open FDI regime, developing domestic capacities to build ecosystems in specific sectors, and good governance principles including timely policy response. This chapter makes an attempt to analyse the role that trade facilitation can play in strengthening India’s GVC participation. This chapter draws in some sections from the author’s previous work entitled “India’s emerging connectivity with Southeast Asia: Progress and prospects” ADBI Working Paper, No. 507 Asian Development Bank Institute (ADBI), Tokyo.