Impact of Linking into Global Value Chains on Indian Employment

Download Working Paper


With global value chains (GVCs) speedily gaining prominence in defining the prevalent economic context it has become vital to understand their implications on developing economies. This study examines the industry-level impact of linking into GVCs for the Indian labour market, spanning the period 1995-2011. Using methodologies of fixed effects and Generalized Method of Moments (GMM) estimations, it analyses the employment impact of foreign value added in output, foreign value added in exports (backward linkages) and domestic value added in exports of intermediate goods and services (forward linkages). The results show that while backward linkages in GVCs have negatively impacted employment in India, forward linkages did not have any statistically significant impact. The analysis includes manufacturing, services, agriculture and allied activities.