By Terri B. Chapman, Jhanvi Tripathi & Rakesh Kumar Sinha
Executive Summary
The risk of supply chain shocks has never been more palpable than today, following compounding crises from the US-China trade war, the COVID-19 pandemic, and the war in Ukraine. Global Value Chains (GVCs), once viewed as a panacea for economic development, are coming under increased scrutiny in different parts of the world. Increasingly complex, cross-border production processes are exposing companies and populations to a multitude of risks. At the same time, it is becoming clearer that greater integration into GVCs does not inevitably lead to improved economic outcomes or shared prosperity, especially for developing countries.
This report examines how India can better integrate into GVCs while building resilience. The report draws on a survey of executives from 200 domestic and foreign companies in India across six sectors: aerospace and defence; automotive and auto-components; capital goods; electronic systems design and manufacturing (ESDM); new and renewable energy; and pharmaceuticals and medical devices. The report presents insights into these companies’ perceptions of GVCs amidst immense disruptions from different causes. It describes the firms’ views on India’s trade policy, and summarises the key challenges facing these enterprises in scaling production and integrating into GVCs in India. The report makes recommendations for policy intervention in eight areas, and outlines strategies for incorporating resilience into India’s GVC linkages.