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Creating Manufacturing Jobs in India: Has Openness to Trade Really Helped?

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  • Pankaj Vashisht

Abstract

After following inward oriented economic policies for nearly four decades, India opened up to international trade in the early 1990s. Since then, the trade integration of the Indian economy in general and the manufacturing sector in particular has increased phenomenally. Against this backdrop, this paper analyses the direct as well as indirect impact of trade on jobs in the Indian manufacturing sector. Using the growth accounting approach, we find that the direct impact of trade on manufacturing jobs has been positive. However, trade induced decrease in labour demand has neutralized direct job gains to a great extent. Therefore, unlike other Asian economies, the overall employment gain from trade has been minimal. The paper argues that supply side constraints should be addressed urgently to enhance job gains from international trade.

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  • Pankaj Vashisht, 2015. "Creating Manufacturing Jobs in India: Has Openness to Trade Really Helped?," Working Papers id:7126, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:7126
    Note: Institutional Papers
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    Cited by:

    1. Sakshi Aggarwal & Debashis Chakraborty, 2020. "Is there any relationship between Marginal Intra-Industry Trade and Employment Change? Evidence from Indian Industries," Working Papers 2044, Indian Institute of Foreign Trade.
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    3. Francis Kuriakose & Deepa Kylasam Iyer, 2020. "Job Polarisation in India: Structural Causes and Policy Implications," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(2), pages 247-266, June.

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