Join GVC network, ADB

India needs to increase its participation in the Global Value Chain (GVC) by leveraging on the foreign direct investment (FDI) flow into the manufacturing sector, executives at the #Asian Development Bank said.

“India need Foreign Direct Investment and it needs to participate in the global value chain,” said ADB’s deputy chief economist #Juzhong Zhuang, referring to the push for building up manufacturing in the country.

The FDI not only contribute to the technology transfer in the domestic market, but it can connect India to the global value chain, making it an important input-output link, added #Jong Woo Kang, ADB’s principal economist.

“It can help connect India to production networks in other countries,” he said.

“So far, India has a well-developed service sector, (but) it has a large potential in the manufacturing sector,” elaborated Zhuang after launching ADB’s #Asian Economic Integration Report 2016 in Singapore on Dec 6, 2016.

“India should focus on manufacturing, import parts, assemble products and supply to the domestic market as well as export,” said Zhuang.

A Chinese factory located in India can import parts from China for assembling and re-export to global markets, added Jong as an example for India to leap into the GVC.

“India can benefit from changes in this global value chain and be part of the international production network utilizing its cheap but quality labour,” he stressed.

India is not only the magnate for FDIs but its businesses have also emerged as leading Asian investors in the region, noted Jong.

“India’s investment into the UK, Europe and other parts of the world is becoming more and more important. India has become an important component of investment network around the globe,” he said.

According to ADB research, the Indian government’s commitment to foreign investment is the most critical component. “Commitment from the top policy makers is a very crucial factor in attracting FDI,” he noted. fii-news.com