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The World Trade Organization (WTO) recommends all members to phase out their export subsidies. While this may render export-oriented industries susceptible to tighter competition in their import markets, productivity improvements could help offset such disadvantages. This article explores the interaction between these two different aspects to evaluate the economy-wide impact of export subsidy reforms and productivity improvements in the Indian textile and clothing sector. Our analysis stands on various policy simulations applying the general equilibrium model of the Global Trade Analysis Project (GTAP; Hertel, 1997 ). The welfare impacts of the removal of Indian textile and clothing subsidies in terms of equivalent variation shows that India is expected to encounter a loss of about 71.5 million US$, while other Asian countries may gain about 218 million US$. In a different scenario, we simulate the impact of a complete phase-out of subsidies provided to the textile and clothing industry of India and a simultaneous increase in total factor productivity growth to 3.5 per cent. This leads to a net positive welfare change and an expected gain of about US$ 13.17 million in terms of allocative efficiency. We conclude that merely removing subsidies is not enough, as is often argued by Indian policymakers that such a policy reversal might result in contraction of the sector. Investments in total factor productivity should come about simultaneously, probably by employing surplus funds from saved subsidy payments in areas like research and development and infrastructure. This conclusion may be qualitatively generalised for any sector in the world, which is examined for export subsidy reforms, but similar economy-wide studies are recommended for specific cases.JEL Codes: F00, F13, C68, L670

This paper analyses the determinants of competitiveness of auto industry in India, based on a field survey and a quantitative analysis of secondary data. It highlights that all segments of Indian auto sector are growing at a fairly high rates and their productivity as well as export intensity is on the rise. Domestic sales are rising, but they have declined in certain sub-segments of vehicles. However, the R&D expenditure has been scarce. Effective rate of protection of automobile assembly is far higher than that of auto-components manufacturing. Unorganised sector, which is quite significant in auto-component manufacturing, has grown more rapidly in the urban areas than in the rural areas. The econometric analysis suggests various measures that could be taken by the government, particularly, the credit facilitation for SMEs. A field survey comprising auto manufacturers in India underlines various constraints faced by the sector, such as the shortage of skilled manpower along with poor infrastructure, fluctuating steel prices and unavailability of land at reasonable price. This suggests that the government could facilitate the industry in becoming more competitive by taking steps such as structural fiscal reforms, cut in import duties of raw materials and capital goods, promotion of R&D and FDI, training facilities, research-backed negotiations of FTAs, roadmap for harmonising emission norms across the country and infrastructure improvement. Industry, on the other hand, should improve its R&D capabilities and market research.

Not Available ; The status of rural women in independent India occupies an important role and all efforts are being made to establish the significant place that she can play in the development of her own self and the society at large. Keeping this in mind, the Government of India launched Swarnajayanti Gram Swarozgar Yojana (SGSY) in 1999 to empower rural women. In this context, a study was conducted in Vellore district of Tamil Nadu to assess the social-profile and entrepreneurial characteristics of SHG members under SGSY. Following stratified random sampling, data were collected from 150 SHG micro-entrepreneurs. They further divided into Successful Self-Help Group Micro-Entrepreneurs (SSMEs) and Unsuccessful SHG Micro-Entrepreneurs (USSMEs) based on modified SHG micro-entrepreneurial success and unsuccess index specifically developed for the study. Half of Self-Help Group Micro-Entrepreneurs (SMEs) found to be middle aged, mostly educated up to middle school, had membership in two organizations. Three-fourth of the SMEs fell under the medium socio-economic status category. A huge difference in family size was noticed. Only about 38.60 per cent of SMEs had undergone two or more trainings. Hence there is need for capacity building of SHG members in social participation and achievement motivation. ; Not Available

Recent literature has focused attention on the important question of whether the current trend of proliferation of bilateral and regional trade agreements can facilitate creation and development of international production networks (IPNs) among member countries. However, majority of these adopt a partial equilibrium approach, thus ignoring the economy wide impact. As India gets increasingly integrated through calibrated globalization of its economy over the past two decades and creates a web of such trade agreements, this paper attempts to specifically analyze the effect of recent RTAs involving India on its ability to plug into IPNs in Asia by changing international trade and production patterns. The auto-parts industry, identified as one of the high-growth sectors for India's manufacturing sector, with a potential to integrate into existing Asian IPNs, is chosen for this analysis. The paper reviews the current state of India's participation in Asian IPNs identifying the policy challenges, and further undertakes an applied general equilibrium analysis of the above issue by utilizing the GTAP 8 database based on 2004 data to simulate the impact of tariff reduction in auto-parts for India's currently implemented FTAs with ASEAN, Japan, Korea and EU. Additional scenarios of a productivity improvement along with reduction in trade costs along with the RTA, are also explored. The paper analyses the impact of these policy shocks on output, prices and trade volumes ,as well as their impact on overall welfare changes across all regions. The results point to the evidence that India that there are significant gains for India and its trading partners through export expansion and welfare improvements from better resource allocation not from an RTA alone, but from productivity improvement and reductions in trade costs as this should not only reduce border trade costs, but also network costs set up for an IPN.

This study identifies and rationalises some of India's issues and concerns with the signing of the RCEP. By analysing the existing trade balance, import surge trends, dumping and agricultural sensitivities, among other factors, the study justifies India's decision to remain outside of this mega-FTA. Further, it predicts the impact of tariff elimination under RCEP on various macroeconomic variables of the RCEP member countries by using the GTAP model under two scenarios: (i) India does not join the RCEP and (ii) India joins the RCEP. Results show that India's GDP would be adversely affected if it joins this agreement, and its overall trade deficit may further deteriorate after joining the RCEP. In terms of the bilateral trade balance, India's trade deficit with ASEAN and China will grow steeply if it joins the agreement. The study also finds that an RCEP without India may lose its shine as the GDP of most of the other members of the RCEP would be negatively impacted by India's decision to stay out. JEL Codes: F13, F15, F17, F61, O53