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Sectoral Level Analysis of India’s Bilateral Trade over 2001-2015

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  • Aggarwal, Sakshi

Abstract

The paper explores the sectoral level analysis of India’s IIT with rest of world (ROW), to try to identify the key determinants of IIT in the selected sectors for the Indian economy in the 21st century. It also examines the patterns and determinants of India’s intra-industry trade (IIT) in 7 major sectors during 2001-2015 in a panel data framework. The empirical results indicate that Vertical Intra-Industry Trade (VIIT) significantly explains India’s IIT pattern in Base Metals, Chemical, Machinery & Electrical Equipment, Textiles & Garments and Iron & Steel sectors. The analysis further shows that VIIT-type trade pattern is observed with lower income group countries whereas HIIT-type trade emerged with higher income group countries in case of Leather & Footwear and Vehicles and Transport Equipment sectors. The results also concludes that trade facilitation may significantly enhance IIT level with respect to India’s high income partners among all the sectors except Textiles & Garments and Iron & Steel segment; while it may also enhance IIT level with respect of lower income partners in Vehicles and Transport Equipment segment. Interestingly, the preferential trade dummy is found to be significant in limited sectors, implying less influence of the RTA partnerships on trade balance.

Suggested Citation

  • Aggarwal, Sakshi, 2017. "Sectoral Level Analysis of India’s Bilateral Trade over 2001-2015," MPRA Paper 80099, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:80099
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    References listed on IDEAS

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    1. Bojnec, Stefan & Ferto, Imre, 2016. "Patterns and Drivers of the Agri-Food Intra-Industry Trade of European Union Countries," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(2), pages 1-22, May.
    2. Sushil Kumar & Shahid Ahmed, 2015. "Gravity Model by Panel Data Approach," Foreign Trade Review, , vol. 50(4), pages 233-249, November.
    3. Sayeeda Bano, 2014. "An Empirical Examination of Trade Relations between New Zealand and China in the Context of a Free Trade Agreement," Working Papers in Economics 14/04, University of Waikato.
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    Cited by:

    1. Aggarwal, Sakshi, 2023. "LSTM based Anomaly Detection in Time Series for United States exports and imports," MPRA Paper 117149, University Library of Munich, Germany.
    2. Aggarwal, Sakshi, 2023. "Intra-industry trade: Revisiting theory and Literature Survey," MPRA Paper 117182, University Library of Munich, Germany.
    3. Ajmani, Manmeet, 2023. "Examining the interplay between agri-food and trade competitiveness: A review of literature," MPRA Paper 118396, University Library of Munich, Germany.

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    More about this item

    Keywords

    Trade Policy; Intra-Industry Trade; LPI; Empirical Studies of Trade;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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