This book examines the implications of trade reforms with reference to the 1991 reforms for India's manufacturing sector. The gradualist nature of the reform process, the move from a restrictive policy regime to an open one, and the unevenness of the reforms across sectors make the Indian economy a relevant context for understanding the welfare implications of trade reforms.

This study investigates the impact of trade policy reforms (TPR) in India on aspects of economic performance of the organized manufacturing sector. Using econometric techniques on panel data for a sample of 72 three-digit industries (regrouped to form 45 industries), the study finds some evidence of a positive impact of TPR on wage inequality, labour productivity growth and employment growth. The study also uses a Value-Added approach as well as a Revealed Comparative Advantage (RCA) approach to conclude that the comparative advantage of India in the organized manufacturing sector has not changed over the reforms period implying the existence of structural bottlenecks and domestic policy induced rigidities standing as impediments to resource reallocation.

The volume deals comprehensively with an important aspect of the post-reform Indian economy, the trade policy, industrial performance, and private sector development. It focuses on key challenges faced by policymakers including poverty and inequality, modernizing and improving the performance of small scale enterprises, and reforming public sector enterprises where the past performances have been unremarkable. Evaluating the critical issues in service-led growth in the economy, the contributors provide a clear picture of the progress, and suggest policy options. They systematically explore the trade-poverty-inequality links and emphasize the need for efficient regulation of the private sector in the current context. The final essay provides a comprehensive treatment of small scale industries in the era of liberalization.

We evaluate empirically the impact of the dramatic 1991 trade liberalization in India on the industry wage structure. The empirical strategy uses variation in industry wage premiums and trade policy across industries and over time. In contrast to most earlier studies on developing countries, we find a strong, negative, and robust relationship between changes in trade policy and changes in industry wage premiums over time. The results are consistent with liberalization-induced productivity increases at the firm level, which get passed on to industry wages. We also find that trade liberalization has led to decreased wage inequality between skilled and unskilled workers in India. This is consistent with the magnitude of tariff reductions being relatively larger in sectors with a higher proportion of unskilled workers.

This article explores the impact of trade policy reforms on total factor productivity (TFP) growth in the Indian manufacturing sectors. For a range of measures of TFP growth, it explores the pre- and post-trade liberalisation performance at the two-digit manufacturing industry level. The results indicate an increase in TFP growth on average and for the majority of manufacturing industries in the post-trade reform period.

Liberalization measures was adopted by the developed and developing countries to realize the benefit from expansion of market size, inflow of low priced product, inflow of foreign capital, increase in productivity, and growth which in turn reduces social problem of unemployment and income and wealth inequality. However, studies conducted in developed and developing countries on measuring the social impact of liberalization (particularly on wage inequality) shows the negative consequences. Studies find that trade and wage inequality are related in long run but in short run there is no evidence to support this argument however, causal impact of wage inequality on trade is found to be exist. For most of the countries, it is found that the main cause of increase in wage inequality is Skill Biased Technological Change (SBTC) which raises the demand for skilled labor and so prices of skilled labor. For few countries, decrease in supply of skilled labor is found to be associated with increase in wage inequality. As far as Foreign Direct Investment (FDI) is concerned, its effect on wage inequality varies across countries not only in magnitude but also in its direction. From the comprehensive review of literature we found that there are certain unexplored areas, particularly in the context of India, for example effects of traded and non traded goods sector, trade with developing countries, immigration, increase in minimum wages etc. on wage inequality has not been analyzed yet. To make a sound policy based on inclusive growth it is necessary to understand the implication of these issues on wage inequality. Therefore, there is need to carry out the study to address these issues.

The global centre of gravity continues to shift to the Asia-Pacific, the most dynamic region in the world. These economies have generally grown faster for longer periods of time than any other major region in world history. Their embrace of globalization has been a central feature, and driver, of their dynamism. The management of Asia-Pacific economic integration and globalization is crucial not only for the countries themselves but also for the state of the global economy, including importantly latecomer developing economies who look to the region for analytical and development policy lessons. Twenty-eight leading international authorities in the field, drawn from nine countries, provide a comprehensive examination of the causes, consequences and challenges of globalization, in a volume that celebrates the distinguished career of Professor Prema-Chandra Athukorala.Among the major issues examined are the region's distinctive approach to trade liberalization, the effects of economic growth on poverty reduction and the labour market, the special challenges of by-passed regions, the role of ideas in influencing policy making, the modalities of connecting to global production networks, and the importance of remittances in economic development. Several country case studies provide in-depth analyses of development processes and outcomes. These include episodes in economic development, the challenges faced by transition economies, the macroeconomics of adjusting to slower growth and rising debt in advanced economies, and the so-called middle-income trap phenomenon.