Abstract
India’s achievements in global trade are well documented. From a super-autarky regime, India undertook drastic reforms in 1991 and allowed international trade to play its role in raising India’s growth. Undoubtedly, India’s economic reforms and trade liberalisation policies contributed to a dramatic increase in its economic growth. Dismantling License Raj and opening the economy to foreign investment coupled with increased international trade helped India achieve a three trillion dollar economy in the second decade of the twenty-first century. Starting with trade liberalisation, India’s global trade was later linked with global production networks, albeit slowly. In today’s world, trade is mostly driven by global value chain (GVC) and over 65% of the global trade has been routed through RTAs. India’s mature trade policies and practices played a key role not only in raising global footprints but also ensuring strong and stable growth. Dr Amita Batra’s book entitled India’s Trade Policy in the 21st Century carries this journey with convincing facts and figures. This book has eight chapters to present trade policy evolution in the last two decades in the broad context of trends and patterns in global trade and in particular, with reference to the emergence of GVCs.
India’s success stories are phenomenal in some cases as the book documented. Tariffs were reduced from an average of 71% in 1993 to a current average of 10%. However, the tariff structure is still complex in some industries, particularly where India has an edge in GVC-related industries and the presence of inverted duty structure. Though import licensing does not exist anymore, India’s non-tariff barriers are the real culprit prohibiting the GVC-related trade to grow.
Reforms in tariffs and non-tariff barriers have not been accompanied by similar reforms on GVC-related trade till 2015. The overall scope of GVC-related trade received due attention through good quality FTAs, resulting in higher production networks.
As the author claimed, India’s increased openness and integration with the world economy are important factors in explaining the rising GVC-related trade and production. However, the recent economic slowdown due to COVID-19 pandemic demonstrates the need for accelerated reforms, particularly in those industries which offer high employment. Greater transparency in trade facilitation, for example, could strengthen India’s GVC integration.
Another interesting contribution of the book is that it has a detailed account of the economic reforms and trade liberalisation in India in the context of regional economies such as Vietnam, Thailand, Malaysia, Bangladesh and other emerging market economies (EMEs) that have successfully integrated with GVCs/ RVCs in the period under reference. The book further examines policy developments with respect to traditional trade measures such as tariffs and export schemes, trade and GVC-related policies in special economic zones (SEZs) as well as GVC-facilitating policy instruments such as regional/free trading agreements (RTAs/FTAs) and investment treaties. Three sectoral case studies—automobiles, textiles and apparel, and electronics—were presented to examine India’s participation in these dynamic GVC-intensive sectors. Towards the end, the author nicely outlined the trade policy imperatives for India in Chapter 7.
This book is an important and valuable source for those who are studying international trade. Its clarity and lucid discussion are another advantages of this book. Both policymakers and serious research scholars will benefit from this publication. On top, it has quite exhaustive list of references.