{"id":137420,"date":"2021-09-27T20:51:09","date_gmt":"2021-09-27T15:21:09","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=137420"},"modified":"2021-09-29T21:34:29","modified_gmt":"2021-09-29T16:04:29","slug":"tariffs-strategy-china-can-be-countered-by-getting-global-value-chains-to-shift-here-but-we-have-high-trade-costs","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/tariffs-strategy-china-can-be-countered-by-getting-global-value-chains-to-shift-here-but-we-have-high-trade-costs\/","title":{"rendered":"Tariffs & strategy: China can be countered by getting global value chains to shift here. But we have high trade costs"},"content":{"rendered":"\n

Synopsis: <\/strong>China can be countered by getting global value chains to shift here. But we have high trade costs<\/p>\n

Introduction<\/strong><\/p>\n

Recently, the first in-person leaders\u2019 summit of the Quad grouping was held. It resulted in a promising outcome that fits economic integration with the overarching strategic motive. India is an immediate beneficiary of this thrust.<\/p>\n

The clean hydrogen partnership, a semiconductor supply chain initiative<\/strong> and telecommunications<\/strong> are three areas where India will potentially be presented with opportunities to make a technological and economic leap.<\/p>\n

There will be more positive spin-offs if an increasing incidence of inflows locks the domestic firms into global value chains (GVCs). It will lead to diffusion of advanced technology and raise productivity across-the-board.<\/p>\n

What are the issues that can discourage potential GVC investments?<\/strong><\/h5>\n

An important factor influencing integration is the level of trade costs in India<\/strong>, through both tariff and non-tariff barriers. However, India\u2019s trade policy in the recent past has pushed up costs through tariff increases.<\/p>\n

For instance, WTO data shows that India\u2019s simple average applied MFN (most favoured nation) tariff increased from 13% in 2014-15 to 15.4% in 2020-21.<\/p>\n

Further, there\u2019s been a marked shift towards protectionism<\/strong> that has on average increased trade costs. It will only discourage potential GVC investments.<\/p>\n

What needs to be done?<\/strong><\/p>\n

Firstly<\/strong>,<\/em> if the Indian economy is to benefit from the opportunity arising out of the realignment, private firms need enough incentive to invest here.<\/p>\n

Secondly<\/strong><\/em>, the prevailing favourable strategic environment needs supportive trade policies that persuade GVCs to come here.<\/p>\n

Thirdly<\/strong><\/em>, India should reorient its trade regime to draw in FDI that binds the Indian economy to GVCs extensively.<\/p>\n

Source:<\/strong> This post is based on the article \u201cTariffs & strategy: China can be countered by getting global value chains to shift here. But we have high trade costs<\/strong>\u201d published in TOI <\/strong>on 27th Sep 2021<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Synopsis: China can be countered by getting global value chains to shift here. But we have high trade costs Introduction Recently, the first in-person leaders\u2019 summit of the Quad grouping was held. It resulted in a promising outcome that fits economic integration with the overarching strategic motive. India is an immediate beneficiary of this thrust.… Continue reading Tariffs & strategy: China can be countered by getting global value chains to shift here. But we have high trade costs<\/span><\/a><\/p>\n","protected":false},"author":10316,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[8671,10006,8689,216,3451],"class_list":["post-137420","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-changes-in-industrial-policy","tag-chinas-crackdown-on-industries","tag-effect-of-policies-and-politics-of-developed-and-developing-countries-on-indias-interests","tag-gs-paper-3","tag-tech-industry","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":1700803534,"cached_date":1704812233},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/137420","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10316"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=137420"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/137420\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=137420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=137420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=137420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}