ISAS Working Papers

As the world trade architecture modifies itself to accommodate trade through value chains, any country participating in trade invariably becomes a part of the value chains of various industries. For emerging economies, participation in world trade has become easier as the need to build an efficient industry from scratch is no longer necessary. While countries can now participate in a particular stage of a value chain and expect to grow, the problems of immiserising (heavily export-biased) growth may hamper longer-term development. This paper analyses India’s participation in global value chains after identifying its key traded sectors. The analysis shows that, while India’s participation in value chains of key traded sectors has increased, it has varied across industries. India’s participation has increased in more downstream stages in service sectors and textiles and footwear – and shifted to less valueadded segments in some of the primary and manufacturing sectors. The findings are discussed in the context of the recent coming into force of the World Trade Organization multilateral trade facilitation agreement, the policies of the Indian government and India’s trade agreement negotiations. The paper concluded by noting a few policy directions to improve India’s participation in higher value-added segments of value chains so that India’s participation in world trade can act as a means to its developmental efforts.