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Economic Effects of Tariff Liberalization of Prospective India-GCC FTA: A Computable General Equilibrium Analysis

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  • Saba Ismail
  • Shahid Ahmed

Abstract

The trade relations between India and the Gulf Cooperation Council (GCC) countries have been intensified during the last two decades. The GCC has emerged as one of the largest trading partner of India. This article attempts to investigate the result of tariff liberalization on welfare, output, employment and the potential trade flows between India and the GCC region using the GTAP-model. The study reveals that tariff liberalization has positive effects on India and GCC countries, with no or nominal negative effect on the rest of the world. Overall results show that India’s trade relation with GCC countries is increasing continuously, but still there is a lot of untapped potential to bring the welfare gains for both trading partners. Finally, the study concludes that the proposed economic integration in terms of FTA between India and GCC will be mutually beneficial and welfare enhancing, and a case of a win–win situation. JEL Codes: F1, F13, F14, F17

Suggested Citation

  • Saba Ismail & Shahid Ahmed, 2019. "Economic Effects of Tariff Liberalization of Prospective India-GCC FTA: A Computable General Equilibrium Analysis," Foreign Trade Review, , vol. 54(3), pages 224-252, August.
    • Handle: RePEc:sae:fortra:v:54:y:2019:i:3:p:224-252
    DOI: 10.1177/0015732519854934
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    References listed on IDEAS

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    Cited by:

    1. Anwesha Basu, 2022. "The India–EU FTA and Its Potential Impact on India’s Dairy Sector: A Quantitative Analysis," Foreign Trade Review, , vol. 57(1), pages 7-26, February.
    2. Luyuan Xu & Wei Wang, 2021. "A Quantitative Relationship Analysis of Industry Shifts and Trade Restructuring in ASEAN Based on Multiregional Computable General Equilibrium Models," Complexity, Hindawi, vol. 2021, pages 1-12, February.
    3. Ibrahim Ngouhouo & Tii Njivukuh Nchofoung, 2021. "Does Trade Openness Affects Employment in Cameroon?," Foreign Trade Review, , vol. 56(1), pages 105-116, February.
    4. Omphemetse S. Sibanda, Sr, 2021. "The Advent of the African Continental Free Trade Agreement as a Tool for Development," Foreign Trade Review, , vol. 56(2), pages 216-224, May.

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    More about this item

    Keywords

    Indo-GCC trade; computable general equilibrium model; economic integration; GTAP;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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