A report by the Global Trade Research Initiative (GTRI) suggests that streamlining port and customs operations, along with establishing a national trade network, could help Indian firms integrate with global value chains (GVCs) and contribute $1.2 trillion to India’s foreign trade by 2030. Currently, India’s limited participation in GVCs hinders its export potential, despite substantial manufacturing capabilities in various GVC-relevant product categories.
Approximately 70 percent of global trade operates within these chains, covering a wide range of products, including electronics, machinery, pharmaceuticals, and apparel. Poor trade infrastructure, leading to delays at ports and customs, is one of the key factors hindering India’s GVC integration.
Countries like China, Japan, South Korea, Thailand, and Malaysia have excelled in GVCs due to their investments in quality trade infrastructure. The GTRI report recommends six action points to boost domestic firms’ participation in GVCs:
- Automating port and customs procedures, along with implementing green channel clearances for 99 percent of shipments.
- Analyzing the top 10,000 exporters responsible for 85 percent of India’s exports.
- Matching global best practices for ship turnaround times, reducing queues, speeding up transactions, and optimizing infrastructure use.
- Enhancing communication between traders and shipping companies, port operators, and Container Freight Stations (CFS).
- Creating an online platform for all export-import compliance processes through the National Trade Network (NTN). This platform would streamline interactions with customs, DGFT (director-general of foreign trade), shipping companies, ports, and banks.
- Focusing on high-value segments of GVCs, including product conceptualization, design, prototype development, and after-sales services.
The report also suggests inviting top global firms to become anchor manufacturers in priority sectors. These anchor firms would drive innovation and technology adoption across the entire sector, benefiting all firms involved. Citing examples of GVCs, the report highlights the global supply chains for products like Apple’s iPhone and laptops, emphasizing the importance of collaboration and specialization among countries in these chains to achieve efficient production and trade processes.
