Abstract
International trade has been gaining its momentum in India since 1991. The WTO was formed in 1995. The establishment of WTO boosts the world integration process through trade. However, from the second half of the first decade of the 21st century, world trade experienced retrogression. Most countries face trade reversal barriers. In addition to this, the recent pandemic puts a pause on international trade. Worldwide pandemic, however, cannot be considered as the single cause of deterioration in international trade performance, rather the statistics demonstrates that most of the countries experience a decreasing trend in international trade since the first part of the last decade. A close scrutinisation of world trade data (Sourced from World Bank Data) delineates that trade as a percentage of world GDP falls drastically 2011 onwards and starts to improve again since 2016. In the context of the anti-liberalisation environment, the book named ‘World Trade and India: Multilateralism, Progress and Policy Response’, edited by Ajitava Raychaudhuri, Prabir De and Suranjan Gupta, collates a series of articles that discuss various trade related issues of India.
During the last decade, India has faced various trade-regressive challenges in the international market. The articles in the book intend to critically discuss contemporary trade situations, crucial commercial policies, international bargaining concerns, innovational efforts, off-shoring and developmental aspects. Most essays of similar kinds highlight the Indian trade performance from an optimistic perception of liberalisation, whereas this book is an exception in this regard. The book attempts to undertake a comprehensive analysis of the Indian trade situation in the context of the emerging pessimistic atmosphere. The diverse topics of the book will be helpful to researchers and advanced post-graduate students in the field of international economics.
The book is organised into five sections: ‘Trade in Goods and Services’, ‘Trade and Development’, ‘Trade Policy’, ‘Trade Fragmentation and Innovation’ and ‘Trade Facilitation and E-commerce’. Individual section contains different articles.
The first section, ‘Trade in Goods and Services’, has four articles discussing the export performances of India in engineering goods and service goods. Chapter 2 (WTO and India’s Exports: Trends and Challenges with Special Reference to Engineering Goods) analyses the impact of the WTO on the export performance of the engineering sector. Research shows that India is gradually moving up the value chain of production. It started to export high-end products in themid-2000s. India’s export share improves due to the fall in tariff and non-tariff barriers in the targeted market, low-priced imported inputs and greater bargaining power. In the second article, Chapter 3 (India’s Services Trade: Opportunities, Challenges and International Engagements) discusses the service trade composition of India. The research explains that India has a comparative advantage in the labour-intensive service sector due to a huge pool of skilled workers along with good communication skills. India’s service export sector, however, experiences various internal and external hurdles. India’s major trade partner, the USA, raises the trade barriers for outsourcing as well as for temporary immigration. On the other hand, lack of internal infrastructure, monitoring of quality standards and financial facilities also cause the deterioration in service export. Chapter 4 (Regional Comprehensive Economic Partnership: Issues and Concerns for India) undertakes a cost-benefit analysis for the Regional Comprehensive Economic Partnership and tries to make people aware of the positive and negative sides of RCEP. The last chapter of this section, chapter 5 (Cross-Border Trade and Development in India’s Northeast), discusses the cross-border trade in the context of seven sister states in North-East India. This chapter explains that the resource-industry linkage is underdeveloped in these resourceful states due to poor infrastructural facilities.
The second section, ‘Trade and Development’, explores the issues related to trade’s effects on poverty-inequality, FDI, export performance and trade-environment nexus. Chapter 6 (Impact of International Trade on Poverty and Inequality: Theory and Empirics) discusses the contradicting impacts of international trade on poverty and inequality and also mentions the importance of country-specific studies to estimate policy impact. Chapter 7 (Does FDI Favour Exportability in India?) analysed the impact of FDI on the export performance of India. Their study shows that FDI does not have a significant impact on manufacturing exports; however, it has a significant positive impact on the service sector. Chapter 8 (Trade and Environment: Issues and Emerging Perspectives) argued that often developed countries uses environmental issue as the NTB against developing countries. They also show that developing countries must gradually improve their environmental quality standards to penetrate the international markets.
The next section, ‘Trade and Policy’, contains three articles. Chapter 9 (Withering WTO and Indecisive India: Challenges and Opportunities of Trade Policy in a Volatile World) criticised the WTO due to a lack of dynamism. The age-old convention of the WTO needs to be reframed to serve the emerging business environment. They also point out that the Indian manufacturing sector is unable to utilise the global opportunity due to a lack of cost effectiveness. In chapter 10 (India’s Tryst with TRIPS: Revisiting the Patent Conundrum), the author revisits the issues of TRIPS with regard to India. She highlights the fact that India is able to produce generic drugs successfully, but it lags behind in innovation and research areas. Chapter 11 (Antidumping Measures: An Indian Perspective) discussed that India adopts the anti-dumping policy maximum times to protect its domestic market during 1995 to 2018, whereas the adoption rate of anti-dumping policy is quite low among other Asian countries. The USA, Canada and Latin American countries often adopt this policy as trade rectification. Another interesting observation is that China is the target of most anti-dumping cases; however, China does not frequently use it as it has a natural comparative advantage in the manufacturing sector.
The ‘Trade Fragmentation and Innovation’ section has two articles related to innovation, fragmentation and the export performance of India. Chapter 12 (Dynamics of Fragmentation Trade: India in Comparative Asian Perspective) undertakes a cross-country study considering India and other East Asian countries. Data exploration shows that India has a very low share of manufacturing outsourcing compared to other Asian countries. The export share of ‘network product’ and ‘assembled end product’ from India is significantly marginal. To improve its position in the global production chain, India needs continuous technological innovation, sophistication, proper utilisation of its cheap labour force, development of connectivity, power supply, political stability, etc. Chapter 13 (Innovation and Exports: Evidence from Indian Enterprises) analyses the impact of innovation on firm-level export performance. They consider four types of innovation: product innovation, process innovation, organisational innovation and marketing innovation. Their analysis confirms that different types of innovation have positive significant impact on the export decision and on export intensity of a firm.
The last section, ‘Trade Facilitation and E-commerce’, contains three articles. Chapter 14 (E-commerce and India: Emerging Trade Policy, Negotiating Issues and Way Forward) discusses the major challenges faced by India in adopting e-commerce facilities in trade. Chapter 15 (Facilitating Trade in India: What Matters the Most) highlights the importance of digitalisation to upgrade trade facilitation measures and, in turn, improve the exportability of India. They explain how ICT diffusion in India significantly increases India’s own exports as well as its partner’s exports. To utilise the ICT diffusion in full course trade partners should have uniformity in their policies. The authors in the last chapter (Trade Finance: A Critical Conduit for Trade) raise the importance of finance in facilitating trade. They conclude that easy access to finance enhances the export performance of a country. They stress the availability of finance to small and medium-scale enterprises to ensure good performance in the international market.
So, in a nutshell, the book has covered a diverse range of topics in a structured way. It touches all the contemporary trade issues from an Indian perspective. The editorial board organises the chapters according to the theme of the title. As the articles primarily describe current statistics and facts, readers can easily evaluate the existing scenario. The language is very comprehensible, so non-technical readers can also enjoy reading it. The book is unique in a sense that it highlights the difficulties, challenges and limitations of the Indian export sector (including end products, network products, assembled products, intermediate products, etc.), specifically in the present trade pessimistic environment. It is evident from the book that India lags behind in the manufacturing sector, compared to its competitors, China, Taiwan, South Korea, Malaysia, Singapore, etc. India is unable to reap the benefit of global openness and availability of a cheap labour force due to lack of competitiveness. In fact, the growth of service exports is also limited. Continuous innovation, research and development, improvement of infrastructure, road connectivity, power supply and skill upgradation can help to overcome the internal constraints, whereas improving the bargaining power, restructuring multilateralism and continuous negotiation with trade partners may help to improve the external situation. Both these efforts may help India improve its competitiveness in the global market. The authors of various articles succinctly analyse these issues. This edited volume, hence, can guide the policymakers to design proper and effective trade policies that will synchronise with international requirements.