The PPTs describe the process of improving the GDP through GVC. The success story is presented. The automobile companies have to utilize the opportunity to establish a manufacturing company in India.
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How do we become the fifth largest economy
1. How does India become One of
the Largest Economies in the
World in 30 Years?
Thanikachalam Vedhathiri
vthani2025@gmail.com
A Participant of the MOOC “Trading for Development
In the Age of Global Value Chain”
Offered by
edX and World Bank Institute
4. In 1991 the foreign exchange earned was not
sufficient to buy petroleum products from the
exports!
5. There was a severe shortage of foreign exchange to
buy aircrafts, electronic goods, computers, etc.
• India had to fledge gold in Bank of London, UK to get
foreign exchange.
• It had only a small amount to buy petroleum for two
weeks
• The problem was not solved by fledging gold.
•What is the alternative?
6. India Needed more Foreign Exchange to Buy
Petroleum and other Machines for the whole year!
8. Is there any other
method to get
sufficient foreign
exchange ?
IBRD guided
to Globalize
the Indian
Economy!
9. International Bank of Reconstruction and
Development (IBRD) Washington DC, USA
suggested to globalize Indian Economy.
IBRD (WORLD BANK)
Multinational Companies can Invest in
India
11. Macroeconomic Implications of Global Value
Chains
• One world global chains make India interdependent.
• Increases the need for international cooperation.
• Strengthens the economic connections between countries
• Eliminates individual trading od goods between them and
competing for the same final customers
• No rigid projection linkages
• No binding them to a common faith.
12. Key Macroeconomic Implications
• 1. A greater synchronization of economic activity across countries
• 2. Creates strong links in price formation implying that inflation in country
is more likely to spill over its direct and its indirect trading partners
• 3. Countries Episode of export growth are links with episode of import
growth.
• Consequences of currency movements for export and import are likely to
be dampened.
• 4. GVC amplifies the cost of protectionism for trade and growth.
• 5. GVCs trade agreements have the potential to reshape the geography of
production across countries.
13. Hyper Specialization and Durable firm-to- firm
Relationships
• Promote efficient production
• Diffusion of technology
• Capital
• Inputs along the value chains
14. GVCs
• Countries experience the biggest growth spurt during transition
through scale effects
• Delivers more productive jobs
• Employ more women
• Overall effects on employment have been positive
• Reduces poverty
15. Policies that Enhanced Indian Participation
• Eliminating restrictions in factor markets, enabled India to exploit its
comparative advantage.
• Liberalizing trade expanded access to markets and inputs.
• India is continuously improving connectivity to SEZ
• India lowered tariffs
• Created a number of private ports
• India constantly improves the institutional quality
• It also improves intellectual property rights
• It trains the domestic MSMEs
16. Advantages of GVCs in the Automobile Sector
in India
• Advanced Technology
• Automobile Testing and R&D Centers
• Cost-effective Manufacturing
• Efficient use of Human Capital
• Growth of Well-Developed and Quality Ancillary Companies
• Growth of Diploma and Degree Programs in Automobile Engineering
22. Ford Cars for Export to EU, USA, and Latin
America
Ford Ford
23. India has around US$ 300 billion now due to
GVC.
Foreign exchange
has increased
from US $ 2
billion in 1991 to
US $ 300 billion
in 2020.
24. The Impact of GVC in India
• Continuous Growth in many Technologies
• Equal Opportunities for women
• Innovation in Manufacturing
• Exports of products to all nations
• Continuous growth of foreign exchange
• Poverty Alleviation
• Development of Human Capital
25. Impact of GVCs in Software Development
One Software Park
Residential Blocks for
Software Employees
30. What is the fate of old car manufacturing
companies in India?
• Three companies were manufacturing cars.
• One with British technology, second with American technology and
the third with Italian technology.
• Government protected them all the time.
• They did not modernize the technology .
• The demand came down.
• One company closed and the land was used for a Software Park.
• Second also closed the manufacturing.
• Third is also closed.
31. Outcome of GVCs in India
Fast Growth in Many Sectors
Assisted by the Human Capital
32. What is the impact of GVCs on the Engineering
Education?
• Government established 29 Indian Institutes of Technology and
introduced modern engineering programs.
• 30 National Institutes of Technology have been established in all
states.
• Many states established State Technical Universities.
• Government also established Indian Institute of Design and
Management
• They further focused on the industry relevant programs with
cooperation of the manufacturing companies in the region.
33. Industrial Training Institutes
• Offer a large number of industry relevant skill development programs.
• The graduates are absorbed by the GVCs.
34. Polytechnics
• Offer Diploma Programs in Electrical, Mechanical, Electronics and
Manufacturing Technology Programs
• Many are situated near the Industrial Corridors and Hubs
• Middle Level Technicians
• The graduates are employed by the GVCs.
35. Engineering Colleges
• Autonomous Engineering College can offer industry specific
programs
• Many have located near the Industrial hubs and Industrial Corridors
• Offer Part-time Degree Programs for Diploma Holders from the
industry
• Offer Master Degree Programs the Degree Holders from the
Industry
• Well performing graduates are employed through campus
interviews.
36. State Technical Universities
•Almost one in each state
•Offer industry relevant degree and
postgraduate degrees
•Offer consultancy services
•Established R&D Centers
•Offer Interdisciplinary Doctoral Programs for
the Industry participants
37. Institutes of National Importance
• 31 Indian Institutes Technology.
• Offer high end programs in Automobile, Mechanical,
Industrial, Electrical and Mechanical Engineering.
• Industry focused master degree program.
• Interdisciplinary doctoral programs.
• 30 National Institutes of Technology.
• All of them focus on the industry relevant programs.
38. Research Parks
• Institutes of National Importance have established Research Parks
to undertake joint Research and Development work.
• Dedicate Consultancy Units run of a Business Model
• Ample services in design, protype development, testing and
improvement
• Continuous Innovation
• Total Collaboration with GVCs
39. Other GVCs
• Research and Development Centers for Design and Prototype
Development.
• Optimization of Design.
• Value Engineering.
• Ship Building.
• Aircraft Manufacturing.
• Software Engineering.
• Mobile phone manufacturing.
• Industrial electronics and home appliances.
40. Ultimate Goal
• One of the fastest growing nations in the world.
• Highest percentage of young population.
• A leader in GVC.
• Household Income: US $ 18448/- per annum.
• Poverty will be eliminated by 2050.
