As the RCEP negotiations reach a conclusion, the sentiments about the free trade mega-deal remain divided in India. On one hand, there are fears of India’s trade deficit worsening once markets open to the Asia-Pacific. But, on the other hand, India risks losing out on benefits from participating in global value chains and new research suggests that this could well be the case because export growth is associated with greater employment.
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In a new study, Garima Dhir and C. Veeramani ask if exports can lead to job creation, especially in the context of a global production sharing (GPS) where production processes are fragmented. With GPS, intermediate inputs cross borders several times during manufacturing which can lead to double-counting in official trade data. The authors suggest to measure the effects of exports on the economy, it’s important to consider the domestic value-added (DVA) content of exports.
Source: livemint
