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The Global Value Chain (GVC) Development Report 2025 has been released by the World Trade Organization (WTO). The report analyses recent structural shifts in global production networks and assesses how economies are adapting to changing trade, technology and resilience imperatives.

What is a Global Value Chain (GVC)?

A Global Value Chain refers to the entire sequence of activities involved in producing a good or service, where these stages are geographically dispersed across multiple countries. Each stage adds value, and countries participate according to their comparative advantage.

Key Stages of a GVC

• Research & Design
• Sourcing of raw materials
• Manufacturing and assembly
• Logistics and distribution
• Marketing, sales and after-sales services

Illustration: A smartphone may be designed in the US, components manufactured in East Asia, assembled in India or Vietnam, and sold globally.

Major Findings of the GVC Development Report 2025

1. Continued Centrality of GVCs

• GVCs account for 46.3% of global trade in value-added terms (slightly below the 2022 peak).
• Despite global shocks, value chains remain integral to international trade.

2. Shift from Pure Efficiency to Resilience

• Firms and governments are increasingly prioritisingsupply chain diversification and risk mitigation, alongside cost efficiency.
• This reflects lessons from the pandemic and geopolitical disruptions.

3. Structural Shift Towards Services

• Services now contribute more than one-third of value added in manufacturing exports.
• Business services, ICT, logistics and digital platforms are becoming key GVC enablers.

4. Regional Reconfiguration

• Asia, Europe and North America continue to dominate GVC trade.
• However, production networks are becoming more regionally clustered.

5. Reshoring and Regionalisation

• Major economies such as China, the United States and the European Union are reducing dependence on foreign value-added in domestic consumption.
• This trend is driven by concerns over supply chain security and strategic autonomy.

6. Electric Vehicle (EV) Value Chains

• EV production is reshaping automotive GVCs, with China accounting for a large share of global EV output (2023).
• Critical minerals (lithium, cobalt, etc.) are emerging as strategic inputs, creating opportunities for resource-rich developing countries but also risks due to supply concentration.

7. Role of Technology

• Digitalisation, automation, AI and advanced ICT are enabling finer fragmentation of production and lowering coordination costs.
• Economies with strong infrastructure and absorptive capacity benefit most, while others risk exclusion.

India-Specific Findings

• India, along with the Philippines and several African economies, has strengthened its role in business-process and digital service exports.
• India is now among the top 10 value-adding economies globally, with a 2.8% share of global Domestic Value Added (DVA) in exports (2024).
• This highlights India’s growing integration into digital and services-led GVCs, rather than traditional manufacturing alone.

Challenges for India in GVC Integration

1. Infrastructure and Logistics Bottlenecks: High logistics costs, port inefficiencies and delays reduce export competitiveness.
2. Regulatory and Policy Uncertainty: Frequent policy changes and compliance burdens discourage long-term investment.
3. Limited Trade Agreements: Fewer Free Trade Agreements (FTAs) limit preferential access to major markets.
4. Skill and Technology Gaps: Shortage of skilled manpower in advanced manufacturing and high-tech sectors.
5. Sustainability Constraints: Carbon border taxes and ESG norms may increase compliance costs for exporters.

Policy Recommendations from the Report

For Policymakers

• Invest in digital and logistics infrastructure to deepen GVC participation.
• Align climate and trade policies to balance sustainability and competitiveness.
• Improve access to trade finance, especially for MSMEs.
• Promote transparent and coordinated industrial policies that enhance resilience without fragmenting global trade.

For Firms

• Invest in digital tools, AI and automation to enhance adaptability.
• Diversify supply networks to balance efficiency with resilience.
• Leverage regional value chains where strategic advantages exist.