Analysing Opportunities for India in Global Value Chains in Post COVID-19 Era

Abstract

In recent years, trade in intermediate goods has increased manifold with the emergence of global value chains (GVCs). China has emerged as one of the leading countries in the whole GVC network; many countries, including the USA, are heavily dependent on China for the intermediates in the manufacturing sector. The outbreak of COVID-19 and the subsequent lockdowns in many countries, including China, have disrupted the supply in GVCs. This situation has led to the search for alternative markets for intermediates for the sustainable-production process. This study looks at how India can be an alternative avenue for the USA in place of China in the GVC network. It investigates the extent of participation of the countries under study in the GVCs and the gains resulting from it. The main focus of the research is to determine the emerging opportunities for India in GVCs, through correlating the USA industries which are vulnerable to disruption in GVCs as caused by China to those industries of India in which India enjoys a comparative advantage. The analysis reveals that in the ‘textiles, wearing apparel, leather and related products’ and ‘chemicals and non-metallic mineral products’ industries, India could be a replacement of China for the USA. JEL Codes: F10, F13, F15