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An RCA Analysis of India–China Trade Integration

Author

Listed:
  • Imran Ahmad
  • Mohd Hussain Kunroo
  • Irfan Ahmad Sofi

Abstract

The present study discusses the short- and long-run trade patterns of India and China. Applying revealed comparative advantage (RCA) and bilateral RCA, this study specifically tries to find out the pattern of exports and areas of specialization of the economies under study. Major findings suggest that both the countries have been performing well, in terms of merchandise trade exports, over the past few decades, especially since 2000. The export-performing behaviour of India and China with each other, as well as with the world, is seen quite general in nature. In other words, irrespective of their institutional and structural differences, both India and China maintain almost the same upward moving trend with respect to the flow of exports between them and that with the world market. However, once we go from Standard International Trade Classification (SITC) two-digit to SITC four-digit level of analysis, the sample economies reveal their specialized products. At the disaggregate level, India’s export basket is void of food products and raw materials, and it generally contains engineering goods and technologically driven products as advantageous products. The study finds that the areas of specialization are much wider, and the technology-embedded products are larger for China as compared to India. JEL: F10, F11, F43

Suggested Citation

  • Imran Ahmad & Mohd Hussain Kunroo & Irfan Ahmad Sofi, 2018. "An RCA Analysis of India–China Trade Integration," Foreign Trade Review, , vol. 53(1), pages 49-58, February.
    • Handle: RePEc:sae:fortra:v:53:y:2018:i:1:p:49-58
    DOI: 10.1177/0015732516681885
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    References listed on IDEAS

    as
    1. Eichengreen, Barry & Gupta, Poonam & Kumar, Rajiv (ed.), 2010. "Emerging Giants: China and India in the World Economy," OUP Catalogue, Oxford University Press, number 9780199575077.
    2. Wang, Qiang & Li, Rongrong, 2016. "Drivers for energy consumption: A comparative analysis of China and India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 954-962.
    3. Amita Batra & Zeba Khan, 2005. "Revealed comparative advantage: An analysis for India and China," Indian Council for Research on International Economic Relations, New Delhi Working Papers 168, Indian Council for Research on International Economic Relations, New Delhi, India.
    4. Przemyslaw Kowalski, "undated". "China and India: A Tale of Two Trade Integration Approaches," Indian Council for Research on International Economic Relations, New Delhi Working Papers 221, Indian Council for Research on International Economic Relations, New Delhi, India.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    India and China; trade integration; product specialization; exports; RCA;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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