Developing linkages between technology-intensive exports and GVC participation: a perspective from India and G20 countries

Abstract

ABSTRACTThe G20, representing the world’s major developed and developing countries, is experiencing a unique situation with a troika of developing countries – Indonesia, India, and Brazil – holding significant positions for the first time. India, holding the G20 presidency, has a unique opportunity to strengthen its ties while assuming the responsibility of leading the world towards economic recovery. To understand India’s priorities regarding trade and supply chain resilience within the G20, it is essential to examine the background of India’s trade relationships with G20 member countries. This paper explores the connection between technology-intensive exports and global value chain (GVC) participation for the period 1995 to 2018 using advanced time-series analysis. The results point towards the importance of forward linkages for India’s exports of both high and low-tech exports and the backward linkage for medium-tech exports. The results show a connection between technological capabilities and exports to G20 nations through India’s participation in the GVC. In light of these findings, the paper offers guidance for the development of timely and well-informed sector-specific strategies.KEYWORDS: GVC participationG20 countrieshigh-tech exportsARDL co-integrationFDIR&D expenditureJEL CLASSIFICATION: F14F60O19 Disclosure statementNo potential conflict of interest was reported by the author.Notes1. https://www.orfonline.org/expert-speak/indias-g20-presidency-bridging-the-north-south-divide/2. https://www.orfonline.org/wp-content/uploads/2022/07/ORF_GVC-Survey-Report_August.pdf3. https://economictimes.indiatimes.com/news/india/view-india-g20-for-a-collaborative-initiative-on-sustainable-global-value-chains/articleshow/96881881.cms?from=mdr4. https://www.imf.org/en/Countries/IND5. https://www.oecd.org/investment/investment-policy/26th-OECD-UNCTAD-Report-on-G20-Investment-Measures.pdf6. https://pib.gov.in/PressReleaseIframePage.aspx?PRID=18823567. https://www.hindustantimes.com/india-news/economic-importance-of-g20-as-india-takes-its-presidency-101668621970770.html8. https://unctadstat.unctad.org/en/Classifications/DimSitcRev3Products_Ldc_Hierarchy.pdf9. https://economictimes.indiatimes.com/news/economy/policy/india-identifies-five-priority-issues-for-its-g20-presidency/articleshow/95723630.cms?from=mdr10. The data is sourced from WITS https://wits.worldbank.org/gvc/gvc-trade-table.html. The Asian countries include Brazil, India, Indonesia, Russia, China, Mexico, Turkey while developed countries include USA, UK, South Korea, Japan, Italy, Germany, France, Australia, Canada.11. https://www.wto.org/english/res_e/booksp_e/08_gvc_ch5_dev_report_2021_e.pdf12. https://stats.oecd.org/Index.aspx?DataSetCode=TIVA_2021_C113. https://www.wto.org/english/res_e/statis_e/miwi_e/explanatory_notes_e.pdf14. https://info.worldbank.org/governance/wgi/15. https://industryoutlook.cmie.com/