A+| A| A-

Is India Digitally Prepared for International Trade?

India’s digital infrastructure and the value added by digital services to its exports are analysed in order to assess its digital preparedness in the context of international trade. The results show that India lags behind many developing and developed countries in this area. In order to boost India’s trade competitiveness in the digital era, a Digitally-Informed Foreign Trade Policy is advocated that would aim to improve India’s digital infrastructure for trade, enhance the digital content in its exports, build digital skills in tradeable sectors, promote the use of digital technologies in manufacturing exports, and use big data analytics to inform foreign trade policy.

With the onset of the fourth industrial revolution, also called Industry 4.0, many developing countries, including India, are facing new opportunities and challenges in international trade. Increasing digitalisation can greatly impact the trade competitiveness of the countries, benefiting those who are able to increase the digital content of their production and exports while adversely impacting countries that are unable to catch up in the digital race. To digitally prepare itself, India has initiated some concrete programmes like Digital India, which aims to transform India into a digitally empowered society and a knowledge economy. As stated on its official website, it aims to provide citizens “with Digital Infrastructure as a Utility; Governance and Services on Demand; and Digital Empowerment.” The government has initiated many sub-programmes under Digital India, including the Aadhaar identity platform, an agri-market app, e-panchayat, and MyGov. The government has also initiated a working group to design a national policy for e-commerce. In this context, the main objective of this article is to examine India’s digital preparedness in the context of international trade by comparing the country’s digital infrastructure to other developing and developed countries, along with various indicators of digital development. It will also attempt to estimate the extent of digital content in India’s exports in different sectors—including its traditional export sectors—as compared to other countries. It also aims to offer a way forward through suggestions that aim to help increase India’s trade competitiveness in the digital era.

Digitalisation can impact the global trade competitiveness of a country since it affects all the stages of a value chain, including pre-production, production, and post-production. It could lead to a large-scale reorganisation of existing global value chains (GVCs) and result in the emergence of new GVCs. Firms are using big data analytics to analyse consumer preferences, forecast demand, and customise products. Super platforms like Google, Amazon, Facebook, Apple, and Alibaba are providing two-sided and in some cases many-sided markets where producers and consumers can interact, enabling the platforms to collect more data and strengthen their capacity to reorganise international markets (Gürkaynak et al 2017; Rysman 2009). The network effect increases the gains of these platforms and enhances their global competitiveness, thereby allowing them to lock in their attractiveness, destroy competition, and emerge as powerful monopolies (Belleflamme and Peitz 2016).

To read the full text Login

Get instant access

New 3 Month Subscription
to Digital Archives at

₹826for India

$50for overseas users

Updated On : 8th Feb, 2019

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

The direction of convergence between headline and core inflation and its probable impact on the future course of monetary policy is a debated...

The Indian labour market is characterised by a high level of informality, with large numbers of workers in poorly paid “lower tier” informal jobs...

Geoffrey Bawa (1919–2003) was Sri Lanka’s most celebrated architect in the 20th century and his half-a-century long career shaped the nation’s...

Whether the “practising Adivasi” or the practitioners of traditional knowledge are subjects of different rationality is examined here. Through a...

The Indian tea economy is undergoing acute transformations, with the divestment of tea companies from plantations leaving thousands of plantation...

Firms can avoid taxes legally, even though it is well understood that tax payment is a fundamental and measurable behaviour towards society. In...

How the pattern of inequality in maternal healthcare service utilisation has evolved after the adoption of the National Rural Health Mission in...

Following the announcement of demonetisation on 8 November 2016, India saw the withdrawal of nearly 86% of the cash in circulation. This caused...

The evolving COVID-19 pandemic requires that data and operational responses be examined from a public health perspective. While there exist deep...

Back to Top