India’s Electronics Manufacturing Sector: Getting the Diagnosis Right Smitha Francis

The Indian government has announced several policy measures aimed at promoting domestic electronics manufacturing as part of its “Make in India” initiative (2014). A casualty of incoherent policy regimes for nearly three decades, the electronics industry appears to be receiving some focused attention. The efforts began after the National Policy on Electronics (NPE), drafted by the Department of Electronics and Information Technology (Deity) in 2012, highlighted the abysmally low level of value addition in domestically produced electronic products, which ranged just between 5% and 10% in most cases at the time (NPE 2012). Instead, electronics manufacturers appear to prefer importing…

Evolution of Technology in the Digital Arena: Theories, firm-level strategies and state policies Smitha Francis

This paper analyses the evolution of technology, encompassing the characteristics and dynamics of innovation and technological change, as well as their interactions and interrelations across diverse technical areas that generate organisational changes and systemic socio-economic changes. It provides a brief overview of the various theoretical approaches that have examined technological evolution at different analytical levels, which is followed by a detailed discussion of Carlota Perez‟s techno-economic paradigm. Evolution_Technology (Download the full text in PDF format) (This study was commissioned by the Centre for WTO Studies (CWS), IIFT, New Delhi,  and carried out by the author as an independent consultant)

RCEP: Is the mega FTA leading us into non strategy? Smitha Francis

As the 19th Round of the RCEP (Regional Comprehensive Economic Partnership) negotiations winds up in Hyderabad, India, there are many grounds for being apprehensive about the direction in which it has moved. RCEP is one of the two proposed mega free trade agreements (FTAs) aiming at greater integration in the Asia-Pacific region, the other being the Trans-Pacific Partnership (TPP). Beginning in May 2013, the RCEP negotiations are being undertaken between the ten member countries of ASEAN and its six FTA partners Australia, China, India, Japan, New Zealand and South Korea. The initiative was launched to address concerns about the ‘noodle…

Changing the Investment Policy Menu Smitha Francis

The WIR rightly focussed on the interactions between national investment policymaking and international agreements. But its investment policy reform agenda remains incomplete. Changing_Investment_Policy  (Download the full text in PDF format) (This article was originally published in the Economic and Political Weekly, Vol. XLVIII, No. 05, February 02, 2013.)

Transfer Pricing and Tax Evasion: Beyond the trans-Atlantic furore Smitha Francis

As the countries of the European Union struggle to find the resources required to close their budget deficits and face enormous pressure to cut expenditures, tax avoidance in their jurisdiction by US transnational corporations (TNCs) like Google, Amazon, Starbucks and Microsoft through transfer pricing practices has come under intense scrutiny by fiscal authorities there. Despite the irony, the significance of this should not be lost on developing country governments, where transfer pricing has long been an issue for host economies of foreign direct investment (FDI). Transfer pricing refers to the pricing set between two related companies in intra-company transactions or…

Fiscal Policy Evolution and Distributional Implications: The Indonesian experience Smitha Francis

[Working Paper No. 01/2012] This paper analyses Indonesia's resource mobilisation and public expenditure policies against the backdrop of her inequality trends and macroeconomic policy evolution. It is argued that the country's fiscal policy stance has been adversely impacted by her monetary and financial sector policies under an open capital account, with attendant regressive distributional implications. Juxtaposing the analysis of revenue mobilisation trends and taxation policies with the evidence of increasing asset and land concentration and persisting high inequalities reveals that the increase in income tax revenue did not necessarily come from the upper income profiles or corporate profits. Meanwhile, although…

Rethinking Investment Provisions in Free Trade Agreements Smitha Francis

Developing country governments are increasingly resorting to comprehensive trade agreements involving profound commitments in public policy, which have wide-ranging adverse consequences on food security, industrial development, financial stability, etc. This paper analyses investment disciplines in FTAs in order to come to an understanding of their overall impact on a developing country FTA partner’s policy space, and therefore, on its development prospects. It is argued that given the links between trade and investment commitments within and across different FTAs, South-South FTAs have become as problematic as North-South FTAs. Rethinking_Investment_Provisions  (Download the full text in PDF format)