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Women’s work & FDI policy in India Seventh Gender and Economic Policy Discussion ‘Politics and Economics of FDI through gender lens’ 9 th April 2013 Anandi.

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Presentation on theme: "Women’s work & FDI policy in India Seventh Gender and Economic Policy Discussion ‘Politics and Economics of FDI through gender lens’ 9 th April 2013 Anandi."— Presentation transcript:

1 Women’s work & FDI policy in India Seventh Gender and Economic Policy Discussion ‘Politics and Economics of FDI through gender lens’ 9 th April 2013 Anandi Venkateswaran Under Secretary (exports) Government of India Disclaimer: The views expressed in the presentation are purely that of the author and do not represent the views of the Government of India

2 Policy options for Govt to increase Output/ Employment Low investmen t Low supply chain infrastructure High wastage High cost High inflation Low savings Monetary policy-high interest rates Low investmen t /low exports/hi gh imports/d eficits Exchange rate interventions to stop rupee from appreciating Low employme nt Improve investment Or Exchange rate intervention- keep rupee from appreciating – improve exports/output Or face buy outs by foreign cos. Allow FDI

3 What is FDI World Bank foreign direct investment is acquisition of “a lasting management interest (10 percent or more of the voting stock) in an enterprise operating in an economy other than that of the investor.” Includes foreign equity inflows. Re-invested earnings,other forms of capital(NRI investment)

4 Host country perspective

5 Investor perspective-What attracts FDI? FDI attractiveness Market size-per- capita income like retail telecme Resources- capital/labour/infras tructure Mining,gas,power Efficiency -Productivity- wage differentials Mfg, trade,transport Good governance

6 FDI- A caution Is mobile capital chasing immobile labour? FDI- neo-classical oppression of capitalists on bourgeois Ground rules- WTO rules on services restrict movement of labour but supports foreign capital flows for members Indian scenario women’s labour is highly immobile- traditionally Solution- Marxist approach – labour contract is a ‘contested exchange’-Wage -relative bargaining positions of labour and capital. Highly mobile capital- pressure on immobile labour - seek incentives subsidies, tax exemptions etc Solution lies in policies for FDI to compete fairly with benefits both for consumers and workers-cheaper goods and greater mobility

7 FDI flows into India

8 Share of top 10 investing countries FDI equity inflows

9 Top five Indian destinations - FDI equity inflows Jan 2013

10 Top 10 sectors of cumulative FDI equity inflows into India Apr 2000-Jan 2013

11 Sectoral distribution of female workers (UPSS) %

12 Elasticity of Employment to GDP

13 What typifies skill levels - Indian manufacturing employment Highly dispersed skill levels-production lines Over-lap of skills-defects accumulation Highly skilled /short production chain Semi-low- skilled longer production chain ( most women workers belong here

14 occupations with high women share of employment and impact of FDI

15 FDI policy where Sectoral share of female workers (UPSS) in 2009 is high

16 Foreign companies presence in women-oriented sectors Agro-based industry- India produces 50% of World's Mango, 19% of Banana, 36% of Cashewnut, 38% of World's Cauliflower, 28% of Green Peas (Coca-Cola, Pepsi,Britannia, Danone, Nestle, Cadbury, Lever's Kellogg’s) -high rural presence can be capitalised by FDI. Automobile industry-Audi, BMW Chevrolet DaimlerChrysler (Mercedes) Fiat Ford General Motors, Hero Honda, Yamaha Motors, Hyundai Motors Emmar Properties, of Dubai UK-based construction Construction industry:Emmar Properties, of Dubai UK-based construction Share of female workers in agri, forestry, horticulture Urban Rural

17 FDI in automobile industry-implications 73% of manufacturing employment Employs 17 mn people- direct and indirect(2012) auto-component more labour-intensive than the auto - assembly segment. High imports auto-components from EU, Thailand, South Korea, China W.e.f Jan 2013 import duties - components for ASEAN halved to 5% from 10% -phased out by Dec % of components to be imported benefit consumers at the cost of domestic industry/workers.. growth in emoluments lower than growth in labour productivity. Need for skill-development.

18 Average growth in employment in automobile sector

19 Growth in number of automobiles produced in India

20 India’s Export Growth in automobiles ( nos)

21 Trends in Skill requirement by 2022

22 Initiatives in skill development ‘ Time lease’ Gujarat country’s first vocational university. Skill vouchers Scheme Gujarat ‘Global Talent Track’ in partnership with ‘CISCO system INC’ and some 900 colleges across 15 states, tied up with the University of Kashmir to train degree students with the job skills that employers are looking for. The Prime Minister’s National Mission on Skill Development targets training 500 mn skilled persons by 2022-

23 FDI in retail Total retail value (Share in GDP) $225 bn(11%)$470bn$660 bn Total employment Nos200 mn225 mn Organised retail Value $ bn827 (31% clothing & apparel and home supplies 20-30%)

24 Implications on employment- Bharti-Walmart Loss of unorganised low-skill jobs in short run and loss of self- employment Women fruit and vegetable vendors most vulnerable-set to suffer organised retail improves farm prices Low consumer prices compensate job loss -low inflation, increased output,semi-skilled employment, tax collection for economy Bharti-Walmart forcing farmers to be cost-competitive –FDI make industry contestable non-exclusive partnership-revocable –Bajaj quit Kawasaki

25 Share of retail in female urban employment fell from 22.85% in to 16.63% in 2004, smaller fall in rural. Women’s share in total retail employment also fell from 11.25% to 9.47% (urban), smaller fall in rural – Walmart effect?

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27 Agro-industry-women’s domain Set to curtail post-harvest losses Quality exports- SPS measures lower Scope for cheaper consumer prices through consolidation of ghanis, chakkis, puffing units, mills,solvent-extraction plants supporting finance, infrastructure, credit facilities for agro- based industry impact women agricultural laborers more than farmers-study on sugar industry, Maharashtra (Shejal2013) Boom in tertiary sectors in rural areas Women in fish processing, plantations,fruits, vegetables to benefit

28 Recommendations-women skill development Build India as a hub for skilled-womanpower Specific skill-requirements of women in sectors:- mfg: Add ITIs dedicated for women The Prime Minister’s National Mission on Skill Development targets training 500 mn skilled persons by Reverse causality moderate skill-dispersion- Potential solutions » increase semi-skilled workers with primary or secondary education reforms in education and training policies, computer literacy Agro-based industry:-training in quality, packaging, marketing export promotion, brand management, finance, credit access etc Utilise KVICs,DICs etc for skill development

29 Recommendations-FDI conditionalities job creation conditionalities - women inclusive Head-exchange programs. prescribe export share-case of PEPSICO CSR conditionalities- safe and good conditions of work – initiatives Tata Motors, IL&FS, Fiat India, BhartiWalmart

30 Recommendations-legal issues Insist on movement of un-skilled workers under mode 4 of GATS agreement Competition laws to rule out predatory pricing policies of Foreign companies Labour laws Fiscal policies to tax profits, Taxation laws for tax havens like Mauritius-improve revenue for social sectors Fiscal benefits to Foreign companies employing a stipulated % of women Maintain FDI in muti-brand retail upto 50% only until review. Allow states to decide on caps and entry of FDI beyond the minimum level depending upon local conditions and cultural preferences

31 Other recommendations Allow FDI in labour- competing sectors of women employment to enhance mobility of labour Brand promotion of ‘made-by- women’ products Seek waiver fee for Importer-Exporter Code numbers for women Seek greater assistance under EXIM policy-focus schemes Lower threshold for status holders for women Women banks to fund agro-based industries Vulnerable unorganised women workers such as vendors to be supported during transition to multi-brand retail Under the wings of demographic dividend Skilled worker supply especially those of women, should be the business of future for India.

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