Indian Westerlies

International Production Networks (IPNs), or the Global Value Chains (GVCs), are increasingly playing a major role in international trade. GVCs includes those services too, which move with the production value chains, in terms of support activities, such as logistics and business processes, that are linked to manufacturing activities. This blog has been vocal about the importance of IPNs and value chains in global trade. The current post is a continuation of that line of thought.  The way we look at the trade statistics is undergoing a radical change in recent days due to GVCs. Traditional way of looking at gross values of cross-border trade is fast getting obsolete. To use gross trade statistics to develop trade policies, is considered misguided (if not downright stupid!). This fact was recently acknowledged eloquently by WTO DG, Pascal Lamy, in a part of  this speech , on 16th Jan 2013:  Traditional statistics failed to give a clear picture of to...

Foreign trade data, in merchandise trade, for the month of December 2012 was released yesterday by Press Information Bureau .  The gloom continues, with trade deficit widening to 147 USD Billion for the April-Dec 12 period, higher by more than 10 USD Billion, when compared to the same period last year. The summary is pasted below:  Foreign Trade (Merchandise) Data - Dec 2012 The oil imports constitutes roughly one third of total imports. It increased by 12.18 percent over the period of April-Dec, compared to last year. In December, it increased by around 24% over last year. That's disturbing.  The gold import details are not yet available. I am expecting some action here, given the announcements on possibility of higher taxation on gold imports in future.  The above values are in dollars. In terms of rupees, the exports grew (rupee depreciated) by around 9.35% in April-Dec period, and the imports grew faster at a rate of around 14.76%. So, in both do...

Electronics manufacturing industry will get a shot in the arm with applications being invited to apply under M-SIPS, the Modified Special Incentive Package Scheme, which aims to bridge the gap in demand and supply of domestically produced electronics hardware in India.  The issue of our struggling electronic manufacturing industry, and the failure of earlier Special Incentive Package Scheme of 2007, and related issues were highlighted by the blogger here , here and here . This Modified SIPS was notified some time back, but the applications are being accepted from today . The idea is, of course, to help India become a hub for electronic hardware manufacturing, including fabs (semiconductor wafer fabrication units).  The urgency for this measure can be sensed from the plot shown above (from task force report), which projects the Indian imports of electronics to grow to around 300 Billion dollars by 2020, and this will have a devastating effect on the Balance of Pay...

Worried over the decreasing exports from India, Commerce ministry came up with additional export promotion measures. The measures were announced on 26 Dec by Hon'ble Commerce minister of India. Details here .  Blogger Highlights: 2% interest subvention scheme extended for one more year, and the base broadened to include all SMEs of all sectors, and some important parts of Engineering sector, project exports to SAARC etc.  Five new countries (NZ, Cayman Islands, Latvia, Lithuania, Bulgaria) added to the list of countries, the exports to whom, will qualify for incentives under Focus Market Scheme. Three more countries added under Market Linked Focus Product Scheme (Thailand, Taiwan, Czech) and some more products added under Focus Product Scheme. See details here.  A new incentive at the rate of 2% on the incremental growth of exports made to US, EU, Asia, in the period of Jan-March 2013, over the base period of Jan-March 2012 The third one was 'duh'.  ...