Showing posts from October, 2015

Global Value Chains and India: Policy perspectives and challenges

(This post originally appeared in the World Trade Centre Bangalore newsletter) The engraving on the back of my phone reads: 'Designed in California; Assembled in China'. It skips the in betweens, as to where the components and sub-assemblies came from. If they indeed decide to do the full list, it might fill the entire back case. On an iPhone, which is designed by Apple in California, the component sourcing will take us through ASEAN, Japan and many other countries. Some of the software and technology that goes into it might again come from US, Germany and other countries. Though the iPhone is finally assembled in China, the value addition by Chinese is less than 10% for each phone shipped out of that country. The value addition is different for other brands of smartphones, depending on sourcing patterns. This is an example of Global Value Chain (GVC) at work, smartphone GVC in this case. GVCs have changed the way one thinks about international trade and related policy

How TPP affects India's exports - or doesn't

Trans-Pacific Partnership  (TPP) was finalised recently between the 12 pacific rim countries.  Donald Trump hates it and calls the deal terrible. Paul Krugman doesn't like it very much and calls himself a 'lukewarm opponent' of the deal. These two exist at either ends on the scale of knowledge of international economics. And both oppose the deal. Hillary Clinton falls somewhere in between, she opposes too. Everyone, except Obama and the trade ministers who agreed for the deal seem to be opposing. Even the so called industrial lobbies, pharma, tobacco and such, who hoped to get a secret sweet deal for themselves, are opposing. I am yet to see a trade-deal that was opposed by so many and is still going ahead. Funnily enough, I see that some in India are rueing that they are left out. Probably that explains as to why Indian trade minister insists that " we are not left out ". One wonders how.  TPP is not another ordinary deal. It tries to push the envelop o