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Trade Compatibility between Afghanistan and India: An empirical evaluation

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  • Wani, Dr. Nassir Ul Haq

Abstract

In order to expedite the flow of trade the number of regional trade agreements has grown among the countries since the globalization has started. The dramatic changes are quiet visible as these RTA are lucrative and attractive for the countries to manage their trade. Afghanistan started its regional trade with neighboring countries after joining SAARC in 2008. The study period is covering 8 years data from 2008-2015 by employing SITC Revision III classification. The prime focus of this article is to evaluate the trade compatibility between Afghanistan and India by employing Revealed Comparative Advantage (RCA) and Trade Intensity Index (TII). From the results, it is quite clear that the trade between two countries is proceeding in India’s favor. Afghanistan enjoys the comparative advantage in just one product category and for the rest of the products, the values of RCA are less than 1. India enjoys RCA in four product categories. The paper concludes with this recommendation that it will be better for both countries to keep promoting the export of the products which has the RCA ˃ 1. India is leading the existing export market because of its strong export base. Both countries should strive to improve their export potential products, in order to gain the market and to be compatible and competitive partners with one another.

Suggested Citation

  • Wani, Dr. Nassir Ul Haq, 2018. "Trade Compatibility between Afghanistan and India: An empirical evaluation," MPRA Paper 86432, University Library of Munich, Germany, revised 31 Jan 2018.
    • Handle: RePEc:pra:mprapa:86432
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    References listed on IDEAS

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    1. Balassa, Bela, 1977. "'Revealed' Comparative Advantage Revisited: An Analysis of Relative Export Shares of the Industrial Countries, 1953-1971," The Manchester School of Economic & Social Studies, University of Manchester, vol. 45(4), pages 327-344, December.
    2. 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.
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    Cited by:

    1. Rlung, Ahmad Saleem & Rasa, Mohammad Mirwais, 2021. "Impact of Afghanistan-Pakistan Transit Trade Agreement on Afghanistan Trade: An Empirical Exploration," MPRA Paper 122588, University Library of Munich, Germany, revised 23 Dec 2021.
    2. Rasa, Mohammad Mirwais, 2022. "Dynamic of Trade Specialization and Performance of SAFTA: A Case Study of Afghanistan," MPRA Paper 122505, University Library of Munich, Germany, revised 25 Oct 2024.
    3. Wani, Nassir Ul Haq, 2023. "Decoding Social Media’s Role in the Resurgence of the Taliban: A Literature Review," MPRA Paper 121874, University Library of Munich, Germany, revised 09 May 2024.
    4. Rasa, Mohammad Mirwais & Sharifi, Mujeeb, 2021. "Nexus between Women Empowerment, Poverty Reduction, and Relevance with Trade: A Case Study of Afghanistan," MPRA Paper 122574, University Library of Munich, Germany, revised 13 Apr 2022.
    5. Wani, Nassir Ul Haq & Hatam, Ahmad Khalid, 2022. "Afghanistan's Regulatory Business Environment: Exploring the Impact on Trade," MPRA Paper 122418, University Library of Munich, Germany, revised 14 Sep 2024.
    6. Sabar, Parisa & Rasa, Mohammad Mirwais, 2021. "Impact of COVID-19 on Women-Led SMEs in Kabul: Linking and Understanding their Role in Trade and Empowerment," MPRA Paper 122511, University Library of Munich, Germany, revised 08 Oct 2024.

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    More about this item

    Keywords

    Afghanistan; India; Trade Policy;
    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

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