Estimating Domestic Value Added and Foreign Content in India’s Exports

The global production process today is highly fragmented with different stages of production happening in the developed as well as developing world and this has implications for value addition attained in any economy. Further, this also questions our understanding of cross-border trade in the context of fragmented production network. From a policy perspective, it is important to understand value added in International trade, especially as changes in bilateral exchange rates can affect a country’s trade balance. Therefore, we need to understand the import context in the country’s exports and the source of those imports.