India, the world's largest processor of cashew kernels, depends heavily on imports of raw cashew nuts (RCNs), primarily sourced from Ivory Coast. While the Ivorian processing industry is still in its infancy, in the last decade domestic cashew factories have rapidly increased their capacity. This study is an exploration of how the cashew value chain is organized and what this implies for upgrading prospects in the Ivorian cashew sector. Its findings suggest that the cashew value chain is characterized by a bipolar governance structure comprising a trader‐driven segment between Ivorian farms and Indian processors, and a buyer‐driven segment that links processors to Northern end markets. The results are consistent with studies that describe South–South value chains as being less tightly controlled, with a decreased significance of quality related standards and lower entry barriers than those chains feeding into Northern end markets. Inter‐firm linkages in the Indo–Ivorian RCN channel provide few opportunities for product and functional upgrading of RCN suppliers. Considerable institutional support is needed to overcome the barriers to Ivorian firms' direct participation in the North–South value chain for processed kernels.

The global value chain framework has gained increasing prominence as a policy tool for resource-based industrialization. Focusing on synergies between the commodity-producing and related manufacturing and service sectors, value chain interventions assume that buyer-supplier linkages facilitate the upgrading of local industries. This study investigates these synergistic assumptions in the context of the Ivorian cashew industry. The Ivorian case exemplifies how the value chain concept, with its associated focus on local-global linkages, has placed collaboration with foreign lead firms at the heart of the industrial policy agenda. While these collective arrangements are crucial for negotiating inter-firm relationships along global value chains, this study finds little evidence that they have initiated upgrading for local industries. Instead, the emergence of foreign buyers as strategic partners for policy-makers has created opportunities for these lead actors to reinforce their dominant position, stemming from access to finance and technology.

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