Strategizing export promotion in Indian telecom sector: empirical evidence using time and frequency analysis

ABSTRACT

This study evaluates how foreign direct investment (FDI) impact the Indian telecom manufacturing sector and the exports of telecom products between January 2012 and February 2020. It establishes a long-term non-linear relationship among FDI, exports, and industrial production index that exhibits regime shifts, time-varying, and wavelet coherence under exchange rate volatility. The study revealed that telecom sectoral FDI majorly strengthens the service delivery capacity rather than enhancing the production of telecom products. The policy and regulatory initiatives, mainly focused on ‘import substitution’, may not automatically lead to strengthening of domestic manufacturing and increased participation in the global value chain.

KEYWORDS:

• Foreign direct investment
• export promotion
• time-varying cointegration
• regime shift cointegration
• continuous wavelet analysis
• Indian telecom manufacturing

JEL CLASSIFICATION:

• Q43
• Q48
• C51
• C54
• O13

Acknowledgments

We sincerely extend our gratitude to the Editor and the referees for their valuable recommendations, which have enormously augmented the paper’s quality.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Notes

1. The New Telecom Policy 1994 mainly focused on establishment of world class telecommunication services in India (DoT 2020).

2. The New Electronics Policy 2012 sought to establish the foundation of a competitive electronics system value chain in India (Meit 2020).

3. The New Electronics Policy 2019 envisioned proliferation of electronics system design & manufacturing industry in India (Meit 2020).

4. Phased manufacturing programme intends to strengthen mobile handsets and its sub-assemblies manufacturing indigenously (Meit 2020)

5. Started in 2014 to transform India into a global manufacturing hub (Make in India 2020)

6. Launched by Indian government to digitally empower its citizens and ensure better availability of e-governance services by improving digital infrastructure (Digital India 2020)

7. GVC incorporates the activities and people for production of a product/service and its supply, distribution, sales, and post-sales activities through coordination spread across geographies.

8. This strand of research falls outside the domain of the work (except for (Misra and Shankar 2019)), hence not discussed in detail.

9. The data series is available at web portal (MOSPI-IIP 2020) of GoI, Ministry of Statistics and Programme Implementation.

10. January 2012 is selected as starting point of data span as it coincides with the slew of regulatory and policy initiatives adopted around this period, namely, triad of policies covering telecommunications, electronics and Information Technology.

11. Time is displayed on the horizontal axis, while vertical axis shows the frequency (Lower is the frequency, higher is the scale).

12. For small sample size, the area outside the cone may not be reliable (Skoura 2019)

Additional information

Notes on contributors

Brajesh Mishra

Brajesh Mishra is a PhD from Management Development Institute Gurgaon. He has more than 25 years of experience in Information & Communications Sector, including more than 12 years in policy formulation & regulation activities in Government of India. He has authored more than dozen academic articles.

Sajal Ghosh

Dr. Sajal Ghosh is Professor in Economics & Public Policy area at Management Development Institute Gurgaon, India. He is M. Phil, M. Tech and Ph.D with six years Corporate experience and more than 15 years Academic experience. With more than 50 publications, he figured among the top 2% researchers in a global list compiled by the Stanford University. He is editor of the Sage Journal ‘Vision – Journal of Business Perspective’.

Kakali Kanjilal

Dr. Kakali Kanjilal is Professor in Operations Management and Quantitative Techniques at International Management Institute New Delhi. She spent 10 years in the industry in a risk management role in one of the top multinationals globally before embarking on the academic journey where she invested 11 years in teaching, research, and executive trainings. She has more than 30 research publications in her credit. She is an Associate Editor of Global Business Review, one of the top ranked journals in Asia.