Search

In view of the commonly acknowledged positive contribution of Foreign Direct Investment (FDI) on the capital account of Balance of Payments (BoP) of India since 1991 under liberalization wave, the current account impact of FDI has received far less policy attention. However, through high foreign exchange outflows via imports and other expenses coupled with limited exports, FDI invested firms (firms having inward foreign direct investment) may have substantially contributed to the current account deficit in India over post-reform phase marked by substantive trade liberalization initiatives. The study evaluates net current account impact of FDI in India by reviewing various current account transactions of Multinational Corporations (MNC) affiliated manufacturing FDI invested firms from official data sources like RBI and direct firm level trade data from the company’s annual financial disclosures for some recent years. FDI invested MNC affiliates in manufacturing, at an aggregate level, were found to be associated with net foreign exchange outflows on current and trade accounts in various post-reform years. In the firm level study covering two years, this adverse pattern was noted for a majority of total firms, and also for a majority of firms in nearly each industrial sub-groups. Substantially rising net foreign exchange expenses were observed for a consistent set of select manufacturing FDI invested firms over a longer phase in the post-reform period. Apparently, FDI may not be a sustainable tool to manage current account challenges in a developing country like India unless policy caution is applied while engaging further with FDI inflows. [ABSTRACT FROM AUTHOR]

The World Trade Organization’s (WTO) policy of free and fair trade has led to persistent decline in the average world trade tariff rates. It also ensured prior ratification of non-tariff measures implemented by countries. At the same time, countries across the world have introduced trade facilitation measures to ensure smooth flow of goods across borders. Despite these, countries still face substantial trade barriers. Against this backdrop, using data from India, the present paper aims at analyzing the impact of trade barriers on its exports by calculating a bilateral trade restrictiveness index based on tariff, non-tariff and border administrative and regulatory measures. The results show that trade restrictions faced by a country depend on its export basket composition, specific export products and its export destinations and hence are unique to each country. They confirm the existence of substantial trade barriers for a country, as against the general perception that trade restrictions have declined over the years. [ABSTRACT FROM AUTHOR]

India now is the most populous nation on earth, but its modern international trade policy remains an under-researched area. In contrast, the literature on the trade policy of the second largest nation, China, is voluminous. It is widely appreciated that China, since acceding to the World Trade Organization (WTO) on 11 December 2001, seeks -- one way or the other -- an ever-more powerful role in shaping the rules of the world trading system. That aspiration remains the lodestar of Chinese trade policy. As for India, it is understood that from the August 1947 British Partition to the ballyhooed 1991 First Generation Reforms, India's trade policy was that of import substitution. Following the semi-Socialist path chalked out by its founding Prime Minister, Jawaharlal Nehru, India kept tariff and non-tariff barriers high, mandated licenses for importation, and mollycoddled domestic champions favoured by the government in the hopes of transforming its traditional agriculture into modern industry. All the while, as a founding contracting party to the General Agreement on Tariffs and Trade (GATT), and founding Member of the WTO, India put its faith in multilateralism. After 1991, import substitution seemed no longer to be the Indian lodestar. By the early 2000s, protectionism seemed back in vogue. But India also explored free trade agreements (FTAs). That, too, was irregular: India opted for a few bilateral FTAs, but stayed out of mega-deals like the Regional Comprehensive Economic Partnership (RCEP) and Trans-Pacific Partnership (TPP). With Prime Minister (PM) Narendra Modi came expectations of liberalization, but also Hindutva. Redolent of America First advocated by former U.S. President Donald J. Trump, for this Hindu nationalist sentiment, words like 'globalization' and 'cosmopolitan' are pejorative, and hopes for enhancing peace through cross-border commercial interdependence undermines national security. So, what is India's trade policy about? What word best characterizes India's international trade policy since the watershed year of 1991? This trilogy of articles argues that word is 'inconstant'. Since the ballyhooed 1991 First Generation Reforms, India's approach to its trade measures, be they tariff or non-tariff barriers, and to potential FTAs, has been irregular. The lodestar is that there is no lodestar. Part One of this Trilogy might be colloquially sub-titled, 'It all started off so well, but then...' The 1991 reforms promised a genuinely new Indian approach to cross-border trade, foreign exchange (FX) rates, and foreign direct investment (FDI). The reforms sputtered amidst governance problems. India faced no less than 12 serious challenges, and desperately needed a political apparatus that reinforced open trade and investment regime. Parts Two and Three advance this argument by, respectively, critically analysing the twists and turns in Indian trade policy during the first and second terms (2014-2019, and 2019-present) of Prime Minister. Together, the three Parts indicate that if India's post-1991 past is prologue, then future Indian trade policy is uncertain and thus unpredictable. Or to put the conclusion differently, as the U.S. and its Allies navigate the many variables of de-coupling (i.e., euphemistically, de-risking) from China amidst the Sino-American trade war, they would do well to see India's trade policy as a variable, too. [ABSTRACT FROM AUTHOR]

India now is the most populous nation on earth, but its modern international trade policy remains an under-researched area. In contrast, the literature on the trade policy of the second largest nation, China, is voluminous. It is widely appreciated that China, since acceding to the World Trade Organisation (WTO) on 11 December 2001, seeks -- one way or the other -- an ever-more powerful role in shaping the rules of the world trading system. That aspiration remains the lodestar of Chinese trade policy. As for India, it is understood that from the August 1947 British Partition to the ballyhooed 1991 First Generation Reforms, India's trade policy was that of import substitution. Following the semi-Socialist path chalked out by its founding Prime Minister, Jawaharlal Nehru, India kept tariff and non-tariff barriers high, mandated licenses for importation, and mollycoddled domestic champions favoured by the government in the hopes of transforming its traditional agriculture into modern industry. All the while, as a founding contracting party to the General Agreement on Tariffs and Trade (GATT), and founding Member of the WTO, India put its faith in multilateralism. After 1991, import substitution seemed no longer to be the Indian lodestar. By the early 2000s, protectionism seemed back in vogue. But India also explored free trade agreements (FTAs). That, too, was irregular: India opted for a few bilateral FTAs, but stayed out of mega-deals like the Regional Comprehensive Economic Partnership (RCEP) and Trans Pacific Partnership (TPP). With Prime Minister (PM) Narendra Modi came expectations of liberalisation, but also Hindutva. Redolent of America First advocated by former U.S. President Donald J. Trump, for this Hindu nationalist sentiment, words like 'globalisation' and 'cosmopolitan' are pejorative, and hopes for enhancing peace through cross-border commercial interdependence undermines national security. [ABSTRACT FROM AUTHOR]

This paper examines the impact of trade with ASEAN on industry-level employment in India during the period of 1996–1997 to 2016–2017. Using the KLEMS and CMIE databases, we construct a unique dataset covering fifteen industrial sectors in India. We employ the Pooled Mean Group (PMG) approach to estimate the long-run relationship between employment and trade. For the full period of our study, we find that import penetration had a detrimental effect on employment while we find little evidence of any significant effect of export intensity on employment. There exists a structural break at 2004–2005, after which industrial sector has registered a decline in the rate of employment growth as well as India saw worsening of trade balance with ASEAN. Our results suggest that while export and import have had favorable impact on industrial sector employment prior to 2004–2005, AIFTA led to decline in industrial sector employment post 2004–2005. [ABSTRACT FROM AUTHOR]

Negotiations between the European Union (EU) and India regarding a free trade agreement (FTA) have been hindered by numerous difficulties and disagreements since they began in 2007. A few studies have pointed at various key points of contention, including inter alia tariffs on sensitive products, intellectual property rights, trade in services, and chapters on non-trade issues. Despite a long-standing body of research into the ways in which interest groups, particularly business interests groups, influence economic policymaking and the outcomes of trade negotiations, the preferences of interest groups — especially on the Indian side — have been largely overlooked in the context of the FTA negotiations. This is reflective of a general lack of research on preferences toward trade agreements of interests groups in the Global South. In this paper, I analyse the preferences toward the agreement of India's most influential chamber of commerce: the Federation of Indian Chambers of Commerce and Industry (FICCI). The analysis shows that, since the start of negotiations, FICCI's perception of the FTA has been deeply ambivalent and the policy preferences of the chamber are not likely to be met by an FTA between the EU and India. Additionally, the chamber's preferences toward certain chapters of the agreement, particularly toward the key issues, may limit Indian negotiators' ability to compromise, with several potential implications for the final agreement. [ABSTRACT FROM AUTHOR]

India now is the most populous nation on earth, but its modern international trade policy remains an under-researched area. In contrast, the literature on the trade policy of the second largest nation, China, is voluminous. It is widely appreciated that China, since acceding to the World Trade Organization (WTO) on 11 December 2001, seeks - one way or the other - an ever-more powerful role in shaping the rules of the world trading system. That aspiration remains the lodestar of Chinese trade policy. As for India, it is understood that from the August 1947 British Partition to the ballyhooed 1991 First Generation Reforms, India's trade policy was that of import substitution. Following the semi-Socialist path chalked out by its founding Prime Minister, Jawaharlal Nehru, India kept tariff and non-tariff barriers high, mandated licenses for importation, and mollycoddled domestic champions favoured by the government in the hopes of transforming its traditional agriculture into modern industry. All the while, as a founding contracting party to the General Agreement on Tariffs and Trade (GATT), and founding Member of the WTO, India put its faith in multilateralism. After 1991, import substitution seemed no longer to be the Indian lodestar. By the early 2000s, protectionism seemed back in vogue. But India also explored free trade agreements (FTAs). That, too, was irregular: India opted for a few bilateral FTAs, but stayed out of mega-deals like the Regional Comprehensive Economic Partnership (RCEP) and Trans-Pacific Partnership (TPP). With Prime Minister (PM) Narendra Modi came expectations of liberalization, but also Hindutva. Redolent of America First advocated by former U.S. President Donald J. Trump, for this Hindu nationalist sentiment, words like 'globalization' and 'cosmopolitan' are pejorative, and hopes for enhancing peace through cross-border commercial interdependence undermines national security. So, what is India's trade policy about? What word best characterizes India's international trade policy since the watershed year of 1991? This trilogy of articles argues that word is 'inconstant'. Since the ballyhooed 1991 First Generation Reforms, India's approach to its trade measures, be they tariff or non-tariff barriers, and to potential FTAs, has been irregular. The lodestar is that there is no lodestar. Part One of this Trilogy might be colloquially sub-titled, 'It all started off so well, but then....' The 1991 reforms promised a genuinely new Indian approach to cross-border trade, foreign exchange (FX) rates, and foreign direct investment (FDI). The reforms sputtered amidst governance problems. India faced no less than 12 serious challenges, and desperately needed a political apparatus that reinforced open trade and investment regime. Parts Two and Three advance this argument by, respectively, critically analysing the twists and turns in Indian trade policy during the first and second terms (2014-2019, and 2019-present) of Prime Minister. Together, the three Parts indicate that if India's post-1991 past is prologue, then future Indian trade policy is uncertain and thus unpredictable. Or to put the conclusion differently, as the U.S. and its Allies navigate the many variables of de-coupling (i.e., euphemistically, derisking) from China amidst the Sino-American trade war, they would do well to see India's trade policy as a variable, too. [ABSTRACT FROM AUTHOR]

India's foreign policy in South Asia has recently suffered revisions following increased Chinese presence in the region. Since 2007 the Maldives has also witnessed a tremendous change in its foreign policy from the 'India First' to the 'India Out' campaign. Islamic fundamentalism is on the rise in the Maldives and is impacting its foreign policy choices. China has shown great interest in the Maldives. While the Maldives has signed a Free Trade Agreement (FTA) with China and recorded enormous Chinese investments in various projects, the Indian ground in the island state has shrunk in the last decade. This article discusses how the Maldives has realised its geostrategic significance in the Indian Ocean Region (IOR) and how India has succeeded in restoring its traditional clout in Malé after the return of President Ibrahim Solih in 2018. It also discusses the Indian role in the Maldives during the pandemic and the signing of several Memoranda of Understanding (MOUs), maritime security understandings and partnerships with the United States in the Indo-Pacific in view of groupings such as the Quadrilateral Security Dialogue (QUAD) and Indo-Pacific Economic Framework for Prosperity (IPEF). Also examined is how the sharing of the Free and Open Indo-Pacific vision (FOIP) has brightened the scope of India's relations with the Maldives. [ABSTRACT FROM AUTHOR]

Copyright of Global Strategis is the property of Universitas Airlangga and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The liberalization of economies is aimed at boosting domestic growth through foreign investment and trade. The proponents of liberalization argue that opening up markets in developing economies provides access to capital to enhance production. However, proponents of the pollution haven hypothesis (PHH) argue that liberalization and trade agreements have led to the export of carbon-intensive production from wealthier countries to developing economies. The difference between the two outcomes lies in the nature of fixed assets built by developing countries. In this study, we examine the role of fixed capital formation on carbon emissions during two distinct periods of India's economic development. India liberalized its economy with trade reforms in 1991, thereby providing two distinct time periods of closed and open trade policies. The economic data during 1971–2021 is divided into two parts—before (1971–1990) and after (1991–2021) liberalization. Gross fixed capital formation (GFCF) is used as a measure of capital formation while carbon emissions are used to represent environmental impact. Auto-regressive distributed lag (ARDL) model is used for analysis. Results indicate that GFCF had no significant relationship with carbon emission before liberalization, whereas, there was a significant, positive impact post-liberalization. The study is of significance to policymakers in developing countries as it suggests a change in the capital formation towards low carbon-intensive products and services. It also strengthens the argument for investing capital in cleaner energy and technologies. [ABSTRACT FROM AUTHOR]

In the wake of the end of the cold war in the year 1991 and the collapse of socialist ideology, India started to have a liaison with the USA and its collaborating countries such as South Korea, South east countries. Country’s demand augmented to open the doors of the economy and enhance trade with overseas countries to safeguard the country from the wrenching Balance of Payment crisis. India started to build relations with neighboring countries to strengthen the EXIM policy. So India announced ‘Look East Policy’ in the year 1992 to explore the resources of north eastern states and bring regional balance. But by seeking China's dominance over South east asian countries created threat in our Indian ocean so we shifted from diplomatic, “Look East Policy” to most strategic “ Act East Policy”. The significance of South East Asia to India in the fields of economy, polity, social, defence, maritime trade, and security dimensions so that ASEAN holds a prominent position as India's fourthlargest trading partner. Bilateral trade in which ASEAN countries gained phenomenally as their exports are more than imports through Free Trade Agreement. Despite all India’s to and fro trade with ASEAN is of non-oil and non-mineral product which is a significant achievement and showcases the trade integrity. India’s import of textiles, electronic goods, chemicals, and machinery are vital for its manufacturing and service sector which portrays a good sign of trade. Lastly to enhance the trade, India needs to diversify the export effectively. Thus India will be in a Win-Win situation from bilateral trade with ASEAN countries. [ABSTRACT FROM AUTHOR]

Revision in Harmonized System (HS) and its impact of rules of origin (RoO) are matters of immense importance in international trade policy discourse due to its far reaching economic and trade implications. In this article, we analyse the impact of HS amendments on RoO, based on the change in tariff classification (CTC) by examining India's trade agreements with South Korea and Japan. Findings of the article show that the revision in HS impacts 42% of subheadings with CTC rules in case of India-South Korea Comprehensive Economic Partnership Agreement (CEPA) and 28% in case of India-Japan CEPA, thereby potentially affecting up to 48% and 16% share of their total trade, respectively. [ABSTRACT FROM AUTHOR]

Employing a difference-in-differences estimation technique on firm and product level data on Indian textile and clothing exports to the US over 2000 to 2010, we find that MFA quota removal was associated with a rise in export revenues, sales, and total assets of constrained products relative to unconstrained products. We find that the rise in export revenue was due to the rise in export quantity rather than the rise in prices. We also find that trade liberalization in the textile sector was associated with a fall in the export value and prices of Indian products in the US market. [ABSTRACT FROM AUTHOR]

This paper studies the environmental impacts of trade liberalisation in India. The period of analysis is 1991 - 2018. For this study, the carbon dioxide emissions are taken as a proxy variable to air pollution and the pollution is divided into scale effect, composition effect and technique effect. The Auto Regressive Distributed Lag Model is applied in order to check out the long run association of the variables. The results suggest that the trade is positively related to carbon dioxide emission and are statistically significant. The results suggest that the scale effect is responsible for increasing carbon emissions in India. The technique effect is statistically significant and is negatively related to carbon dioxide emissions. After looking at error correction, it has also been established that the long-run equilibrium relationship between the variables is valid. According to the ECM, 84 percent of the adjustment happens gradually over time. [ABSTRACT FROM AUTHOR]

The relationship between India and ASEAN has emerged as a crucial basis of their foreign policy. Both the regions signed a Free Trade Agreement in 2009, which came into effect in 2010. They are now reviewing the FTA to further enhance their economic cooperation. At this critical juncture, this study aimed to analyze the trade and export relationship between India and ASEAN and examine the extent to which the AIFTA effectively influenced it. Additionally, the study intended to determine what other factors influenced the trade and export relationship between the two regions and what future changes are needed in order to make this partnership mutually beneficial. To fulfill this objective, a gravity model was applied to a panel data from 2000–2019. A random effect model was utilized for the estimation. The empirical analysis concludes that the adoption of the AIFTA increased trade significantly; however, had no significant impact on raising exports. The study has identified rising NTMs as one of the important variables impeding realization of India's export potential to ASEAN. This study suggests that in order to increase India's exports and for the future of the FTA, India needs to emphasize on building stronger and extensive relationships with those countries in the ASEAN that are witnessing a higher GDP growth rate, such as Cambodia, Malaysia, the Philippines and Vietnam. [ABSTRACT FROM AUTHOR]

We show that foreign capital liberalization reduces capital misallocation and increases aggregate productivity for affected industries in India. The staggered liberalization of access to foreign capital across disaggregated industries allows us to identify changes in firms' input wedges, overcoming major challenges in the measurement of the effects of changing misallocation. Liberalization increases capital overall. For domestic firms with initially high marginal revenue products of capital (MRPK), liberalization increases revenues by 23%, physical capital by 53%, wage bills by 28%, and reduces MRPK by 33% relative to low MRPK firms. The effects of liberalization are largest in areas with less developed local banking sectors, indicating that inefficiencies in that sector may cause misallocation. Finally, we propose an assumption under which a novel method exploiting natural experiments can be used to bound the effect of changes in misallocation on treated industries' aggregate productivity. These industries' Solow residual increases by 3–16%. [ABSTRACT FROM AUTHOR]

This Abstract discusses the economic development and regional economic relationships between India and Afghanistan. It emphasizes the historical ties, cultural affinities, and mutual interests that shape these relationships and the efforts made to strengthen economic cooperation and promote shared prosperity. The South Asia Free Trade Agreement (SAFTA) is mentioned as an initiative to enhance intra-regional trade and economic cooperation, but its impact is relatively small compared to other regional trade agreements. India's role as a dominant member of Afghanistan is emphasized, and the need for India to take the initiative to expand economic opportunities and meaningful affiliations within the region is emphasized. [ABSTRACT FROM AUTHOR]

In the recent past, agricultural exports, especially plantation crops, which are the backbone of India, have been subjected to many nontariff measures. Since the liberalisation of trade has led to the integration of global commodity markets, developing countries are significantly affected by these trade barriers, which indirectly hurt millions of plantation community. Traditionally, India is well known for its exports of beverages and stringent maximum residual limits, traceability issues, and food safety standards are complex issues surmounting trade in the plantation sector around the world. Hence, the present research study attempts to find the shock of nontariff measures on the prices of both export and domestic beverages and the hammering in returns to the Indian beverage industry by the partial equilibrium method. This model directly measures the simulation effect of nontariff measures by imposing NTM on tea and coffee sector. It is obvious that as the NTM percent increases from 10 percent to 25 percent on tea sector, the loss in export quantity was more from 22.24 million kg to 55.61 million kg and loss of revenue was from Rs. 2997 million to Rs. 7492 million for the corresponding NTMs. Likewise the loss in export quantity (62.85 million kg) and loss in revenue (Rs. 9412 million) were high in 25 per cent of NTM. The present study shows how to allow for market imperfections and trade facilitating effects of nontariff measures in the beverage sector. [ABSTRACT FROM AUTHOR]

Subcontracting with its employment-generating and capital-saving characteristics has the potential to play a very important role in the Indian economy by forging a mutually beneficial linkage between the organised and unorganised manufacturing sectors. Rising competition in the face of opening up of the economy has made subcontracting even more relevant in recent periods. This paper attempts to explore different aspects of subcontracting within unincorporated manufacturing enterprises in the unorganised sector using recent NSSO data. Incidence and pattern of subcontracting across regional, locational, industry groups and enterprise types have been examined. Determinants of subcontracting and its impact on the performance of the units have been explored using econometric exercises. The results indicate that the probability of subcontracting is significantly higher for larger units, in urban areas, in intermediate goods, and for units with a higher proportion of skilled workers. However, subcontracted firms are more likely to contract in size over a 3-year period compared to non-subcontracted firms. This indicates that modern aspects in terms of a larger scale of operation, better accessibility, connectivity, infrastructure, and higher skill intensity are preconditions for subcontracting but unfortunately this tied mode of production has failed to play its expected role. Though they are stepping stones to the modernisation process, they have remained as survival strategies for a large mass of unregistered units. A well-designed policy targeted to promote formal–informal linkage and change of outlook towards the phenomenon of subcontracting may go a long way in exploiting the full potential of subcontracting in India. [ABSTRACT FROM AUTHOR]

International trade has played a part in global obesity epidemic that is causing an upsurge in non-communicable diseases. To address this, governments have sought to provide consumers with more nutritional information about the food that they consume, with the aim of encouraging them to make healthier dietary choices through the use of interpretative front-of-pack (FoP) labelling for packaged food. In the same vein, India released its 2019 draft regulations on interpretative labels, which prescribed 'RED' warning labels forfood products containing high calorie content. Although this was rejected due to a lack of industry consensus, the Food Safety and Standards Authority of India (FSSAI) is again in deliberations, which raises questions under World Trade Organization (WTO) law, particularly the Agreement on Technical Barriers to Trade (TBT Agreement). The TBT Agreement upholds the right of member states to adopt measures required for safeguarding human, animal, or plant life at thresholds they deem necessary. As FoP labels affect domestic and imported goods alike, Article 2.1 may be invoked to ensure adherence to the national treatment and most-favoured nation principles. Similarly, Article 2.2 mandates that technical regulations cannot create unnecessary obstacles to international trade. This involves analysing the design and operation of the measure to balance the degree of contribution towards the legitimate objective and the risks of non-fulfilment. Additionally, since the regulations refer to the Indian Council of Medical Research (ICMR) guidelines for scientific threshold, the use of relevant international standards under Article 2.4 becomes relevant. Based on the TBT analysis, the article concludes with a recommendation to adopt a mandatory framework of health star ratings, while balancing trade liberalisation and members' rights to regulate consumer health. [ABSTRACT FROM AUTHOR]

Trade liberalization changes the volatility of returns by reducing the negative correlation between local prices and productivity shocks. In this paper, we explore these second‐moment effects of trade. Using forty years of agricultural micro‐data from India, we show that falling trade costs due to expansions of the Indian highway network reduced the responsiveness of local prices to local yields but increased the responsiveness of local prices to yields elsewhere. In response, farmers shifted their production toward crops with less volatile yields, especially so for those with poor access to risk mitigating technologies such as banks. We then characterize how volatility affects farmers' crop allocation using a portfolio choice framework where returns are determined in general equilibrium by a many‐location, many‐good Ricardian trade model with flexible trade costs. Finally, we structurally estimate the model—recovering farmers' risk‐return preferences from the gradient of the mean‐variance frontier at their observed crop choices—to quantify the second‐moment effects of trade. The simultaneous expansion of both the highway and rural bank networks increased the mean and the variance of farmer real income, with the first‐moment effect dominating such that expected welfare rose 4.4%. But had rural bank access remained unchanged, welfare gains would have been only half as great, as risk mitigating technologies allowed farmers to take advantage of higher‐risk higher‐return allocations. [ABSTRACT FROM AUTHOR]

In view of the consistent efforts of India and UK to negotiate a Free Trade Agreement (FTA), the paper attempts to estimate the potential export gains for India from the proposed India-UK FTA. The trends of India's exports to the UK have been analysed using compound annual growth rate. To estimate the potential short- and long-run impact of the FTA on India's exports to the UK, the ARDL framework has been employed. The results indicate that market size and liberal trade policies are contributing to India-UK exports in the long-run. The tariff imposed by the UK on India's exports was found to be negative and significant, both for the long- and short-run, thereby suggesting that reduction or removal of tariffs due to the FTA will significantly enhance trade gains for India. [ABSTRACT FROM AUTHOR]

This paper makes an attempt to link export performance with productivity, using Indian data, to assess whether sectors with higher comparative advantage in the FTA partner markets have experienced increased productivity over the years. Changes in exports are then correlated with changes in productivity. The sectors to be studied were identified after calculating the Bilateral Revealed Comparative Advantage (BRCA), and productivity using Data Envelop Analysis (DEA). Malmquist Productivity Index at the sectoral level was used to calculate Total Factor Productivity (TFP) growth. The findings from the paper reveal that though it is natural that due to intense competition at the international level, productive firms will survive; in reality, a few other factors play an important role. A labourabundant country tends to specialise in labour-intensive sectors, but due to low penetration of technology, its TFP growth is slower. Price advantages received by firms are solely due to cheaper labour costs. These firms face challenges in reaping the benefits from economies of scale, which is possible only when the scale of operations is larger, along with higher productivity. Also, the relationship between export competitiveness and productivity tends to ignore various forms of trade barriers. The introduction of new forms of non-tariff barriers mars productivity benefits. Regulatory barriers, licensing, etc. play an important role and productivity growth requires concurrent adherence to such barriers for higher exports. [ABSTRACT FROM AUTHOR]

This article evaluates the influence of regional trade agreements (RTAs) and international borders on international trade between India and the BRI nations using the structural gravity framework. The methodology utilised in this research produces robust results by accounting for endogeneity, RTA phasing-ins, multilateral impacts, and multiple estimation techniques. This analysis demonstrates that the influence of RTAs on trade among India and the BRI countries becomes minimal when the consequences of globalisation are considered. Furthermore, the diminishing influence of international borders on trade flow among member countries shows that more trade being facilitated between open economies. [ABSTRACT FROM AUTHOR]

The inclusion of the agricultural sector under the free trade agreement (FTA) has been a topic of discussion since its inception. This study addresses the question of whether the Indian agricultural commodities are competitive under the ASEAN-India Free Trade Agreement (AIFTA). It relies on the World Integrated Trade Solution (WITS) data for ASEAN and India between the years 2001 and 2021. Methodologically, the Revealed Symmetric Comparative Advantage (RSCA) index value was calculated to evaluate the competitiveness of India on 15 selected agricultural commodities. The study reveals that India has comparative advantage at the aggregate level but there are strong variations across the commodities at a disaggregate level. Commodities such as meat, spices, and cotton products were found to have strong comparative advantage reflecting India's future export potential in the ASEAN market. On the contrary, commodities like diary, edible fruit coffee, soya-bean and palm oil products were found to be at a comparative disadvantage in the ASEAN market over the study period. There is a need to reframe the Indian agricultural trade policy and priority should be given to the exportoriented, high-value goods for augmenting competitiveness with the ASEAN countries in the future. [ABSTRACT FROM AUTHOR]

This paper studies the persistence of innovation efforts by Indian manufacturing firms and how the innovation effort gets affected by the extent of industry-wide competition and the import of technology. The study is based on a panel of listed firms observed continuously over 10 years from 2006 to 2015. Using a dynamic panel structure with Heckman correction, we find evidence of the persistence of innovation effort among the firms; however, the persistence diminishes as the industry-level competition increases. The marginal effect of the competition is lower, and it changes sign if external sources of R&D, such as technology and raw material import, are controlled. Hence, evidence indicates the 'path dependency' of R&D expenditures and persistence of innovation effort, but it is sensitive to the extent of competition in the firm's principal market and import. The findings also suggest that despite opening up the economy since the early 1990s, technology import is still complementing the domestic R&D in India and the persistence of innovation efforts. [ABSTRACT FROM AUTHOR]

This study attempts to empirically examine the importance of market share reallocation and average productivity improvements in driving aggregate productivity growth. By using Olley and Pakes, Econometrica, 1996, 64(6), 1263–1297 decomposition method, we show that aggregate productivity growth has mainly been driven by improvements in average productivity (with‐in firm productivity improvement) and not reallocation during the post liberalization phase (1999–2010) for the manufacturing sector in India. We also show that for many industries (sub‐sectors of manufacturing) the reallocation effect is negative and was driving the aggregate productivity down, compared to average productivity, which has driven the aggregate productivity up. The findings from the study confirms the important role of with‐in firm productivity improvement in aggregate productivity growth. Hence, the study emphasizes the need for positive policy interventions by the government that could enhance with‐in firm productivity growth through internal restructuring. [ABSTRACT FROM AUTHOR]

Copyright of Regional Science Policy & Practice is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

While trade opening is generally welfare enhancing, it requires a reallocation of capital and labor across sectors and firms. The empirical evidence on how this reallocation works is still relatively thin. Our paper contributes to this literature by studying how the labor's share of income adjusted due to trade liberalization in India's formal manufacturing sector during the period 1998–99 to 2007–08. Our baseline model suggests that a fall in output tariffs led to an increase in the labor share while a fall in input tariffs brought about a decrease in labor share. However, once we control for factor and technology intensity of production, we find that this differential impact of tariff reduction on labor share aligns with these classifications. Tariff liberalization led to a decline in labor share in technology and capital-intensive sectors while in labor-intensive and low-tech sectors it brought about an increase. This suggests that following trade opening, demand for labor improved in labor-intensive and low-tech sectors but deteriorated in capital-intensive and high-tech sectors. India's manufacturing bias towards the latter explains the overall decline in labor share in the post-reform period. Furthermore, we find that labor adjustment occurred more efficiently in states with flexible labor laws. [ABSTRACT FROM AUTHOR]

This paper attempts to examine the possible impact of tariff liberalization due to the prospective India–GCC Free Trade Agreement (FTA) on revenue, welfare and potential trade flows between India and GCC by using an ex-ante equilibrium approach through the SMART model on disaggregated trade data. The ex-ante simulation results show that tariff liberalization will have a positive impact on both sides. The reduction in tariffs will lead to a significant increase in trade between India and GCC countries. The overall results suggest that for both sides, the fall in government revenue associated with tariff reduction would be greater than the net welfare gains, but these tariff revenue losses can be balanced by a significant expansion in exports. In a nutshell, both India and GCC have substantial trade potential and the proposed FTA will be mutually beneficial and welfare enhancing. [ABSTRACT FROM AUTHOR]

The study analyses the role of RTAs in determining the export efficiency of India using a stochastic frontier version of the gravity model. We estimate the impact of select RTAs (bilateral, SAFTA, APTA, ASEAN, and MERCOSUR trade bloc) and the partner nation's regulatory quality on India's export efficiency throughout 2008–2018. The findings suggest that India has been substantially able to exploit exports efficiency to its trading partners under FTAs (ASEAN&SAFTA) and bilateral agreements compared to PTAs (MERCOSER&APTA); however, India's exports are yet quite far from the potential frontier. Excluding APTA, all other agreements are statistically significant, implying that joining trade agreements augments India's export efficiency. The study finds that the regulatory quality of importing nations bears a significant positive impact on India's export efficiency. This highlights the importance of good institutions and better regulatory quality in realizing the potential level of exports with partner nations. [ABSTRACT FROM AUTHOR]

Using a panel of establishments from the annual survey of industries, I study the impact of the 1991 trade liberalization episode in India on the employment share of women. Contrary to the predictions of a taste-based discrimination model, I find that establishments exposed to larger output tariff reductions and import competition reduced the share of female workers. I also find that input tariff reductions neither raised nor reduced female employment share. The negative association between output tariff reductions and female employment appears to be driven by establishments which increased the number of shifts per worker. Since women in India are prohibited by law from working long hours and night shifts, this hours-constraint appears to have reduced relative employment of women. This paper is the first to provide empirical evidence of how an ostensibly pro-women policy of limiting female work hours might have unintended side effects. In order to look at the overall effects of liberalization on the gender employment share, I use Census of India data to create a district level panel. I find that districts which were more exposed to the reforms experienced a reduction in the share of female workers. This was observed for both urban and rural areas. [ABSTRACT FROM AUTHOR]

With the ASEAN-India Free Trade Agreement coming into effect on 2010, the ASEAN nations and India agreed upon significant reduction in intra-regional tariffs in order to expand their economic ties. The Free trade agreement however evoked mixed results for India with a few sector being threatened. This study attempts to make a preliminary assessment of the free trade agreement. The specific objectives of the study are firstly to evaluate the benefits and challenges of the FTA to India. Secondly, a comparative study of the growth of trade between India and ASEAN is made during pre-FTA and post-FTA period. [ABSTRACT FROM AUTHOR]

The standard model of open economy macroeconomics suggests that the capital inflow hurts the export of the country through the appreciation pressure. On the other hand, there is a vigorous belief that the capital inflow into the developing countries helps to mitigate the saving-investment gap, encourage the technology transfer, fuel the credit boom, liquidates the stock market and thereby finally increases the output. This paper aims to investigate whether the capital inflow in India is expansionary or contractionary. In doing so, we focus on the different typologies of capital inflow, components of GDP and the absorption capacity of the domestic economy. The empirical strategy adopted by the paper takes care of the issue of the non-linearity and also the endogeneity problem. Analysing the data from 1996 Q2 to 2019 Q4 we find that the capital flow into India could be expansionary as well as contractionary depending upon the nature of inflow and the absorption capacity. Net total capital inflow has no direct impact on growth. But it can accelerate the growth in conjunction with the higher financial depth of the economy, negative output gap, lower country risk and better stock market condition. [ABSTRACT FROM AUTHOR]

Global trade governance is increasingly characterized by a growing fragility in multilateral institutions and a preference for bilateral negotiations. The literature on such negotiations focuses primarily on successful agreements. Academic research on unsuccessful or stalled bilateral talks is limited, although better understanding of such outcomes may provide lessons for future negotiations. This article contributes to such understanding by proposing a revised open economy politics (OEP) framework, adapted to 'second generation' OEP analysis. Our framework highlights the multidirectional linkages between the trinity of interests, institutions and international interactions within trade negotiations, while adding the role of power and ideas to the analysis. We leverage our revised framework to explore why the European Union–India Free Trade Agreement (EUIFTA) negotiations stalled, thus providing insights as negotiators seek to revive them. Drawing on 45 semi-structured interviews conducted over a seven-year period in the EU and India, we examine what impact these different factors had on the progress of talks. Our results suggest that our revised OEP approach provides a multi-layered and integrated framework which enables us to better understand negotiating outcomes. Furthermore, our findings suggest that the shifting balance between emerging economies and developed economies as a result of the geopolitical (power) shifts and ideational change will affect future trade negotiations. [ABSTRACT FROM AUTHOR]

Purpose: India has the distinction of developing one of the world's longest continuing cultures, which has continuously adapted to the evolving political and socio-economic material and unique events of its history. It is often presumed that, by an unquestionable lack of work or elevated jobs, women will bear the cost of economic liberalization. but the theory of trade shows that women, particularly in emerging economies can contribute a lot due to trade liberalization and increase in foreign trade, women have proven to be a remarkable cohesive unit of the community, which in the stage of rapid societal changes has demonstrated great resilience and adaptability. Design/ methodology/ approach: This research is qualitative in nature and based on both primary and secondary data both. Research objective and implications: The research's primary emphasis is to explore the impact of globalization in raising the socio-economic status of women and to highlight the positive as well as the negative impact of globalization on women's livelihood. This paper will be helpful for various policymakers, researchers, government bodies, and various stakeholders of the society to know the contribution of microfinance in rebooting the Indian economy by poverty alleviation. [ABSTRACT FROM AUTHOR]

In the context of quality content of export baskets becoming the most important determinant of export growth for developing countries, we show that reduction in tariff on final import goods asymmetrically affects the quality of skill‐based export goods that differ with respect to the relative skill intensity of their higher‐quality varieties. This offers a plausible explanation for asymmetric quality variations across product groups observed for Brazil and India since the 1980s. On the contrary, tariff‐reduction‐induced quality variations, regardless of their asymmetry, accentuate wage inequality in all dimensions by depressing the informal unskilled wage through displacement of unskilled workers from the formal sector and the consequent informalization of the economy. This suggests that tariff reductions accentuating wage inequality, as shown in the existing literature, may be underestimated if induced variations in the quality of export goods are unaccounted for. A quality‐content production subsidy or a subsidy targeting the use of skilled labor, given to producers of the export good whose quality is downgraded as a consequence of tariff reduction, can be used as a concurrent policy to mitigate such effect. The wage inequality will also decline to some extent following such subsidies. A proportional factor income tax may be a quality‐neutral way to finance the subsidies. [ABSTRACT FROM AUTHOR]

The talks that have been resumed for reaching a free trade agreement between the European Union and India have a good chance for success. Both partners, especially India, have to achieve new economic dynamics in order to be able to face the challenge posed by China. This decisive reason is supported by Brexit, the pandemic and the climate crisis, which also spark an exogenous, geostrategic dynamic that gives new impetus to the paralyzed liberal paradigm of free trade. Taken together, it is likely that exogenous geostrategic factors realign the endogenous economic factors and thus promote a positive outcome despite the ongoing weakness of liberal free trade ideas. [ABSTRACT FROM AUTHOR]

In this study, we examine the effect of external commercial borrowings on investment of the firms in the wake of currency depreciation by drawing the firm‐level data from India. Despite steep growth in dollar debt and its critical implications for firms and macroeconomic stability, the issue was not explored before. This article attempt to fills this gap and contribute to the literature on dollar debt and open economy macroeconomics. We estimate the panel regression to quantify the balance sheet and competitiveness effects. We show that currency depreciation does not adversely affect the investment of those firms that borrow in foreign currency. The findings of the study imply that the gradualist approach to liberalization and prudential policy measures laid by regulatory bodies were effective. We also find that firms that incur dollar debt do not possess adequate natural hedge against exchange rate volatility. This finding calls for the mandatory hedging by firms to immune the economy from the contagion effect. The development of offshore derivatives markets is indispensable for such hedging. The findings also call for the availability of easy and cheaper domestic credit to the corporate sector to lessen the over‐reliance on external commercial borrowings. [ABSTRACT FROM AUTHOR]

This paper investigates the hypothesis that there is an association between increased levels of trade liberalisation and economic growth through a comparative analysis of two giant emerging economies of the world - India and China. For this purpose the paper examines trends in GDP growth and various trade openness measures via empirical analysis of time-series data of the last 43 years, based on eight key indicators to compare the experiences of the two countries. These indicate that rapid and gradual trade liberalisation of both the countries, coupled with supporting economic, institutional, and infrastructural reforms, and advancement in technology led to the linking of these giants with the global markets, which has significantly contributed towards their economic growth, thereby supporting the phenomena that there is a significant positive relationship between liberalisation and economic growth. While China was seen to be experiencing growth, India was also on the right track. Indicators of both liberalisation and growth reveal that both the countries enhanced their economy significantly as they embraced international trade through trade reforms and economic liberalisation. [ABSTRACT FROM AUTHOR]

We evaluate the impact of trade liberalization on the intensive margin of the firm's investment in foreign capital goods. To do so, we use Indian firm-level panel data from a period of a large-scale trade liberalization (1989–1997) to estimate an investment equation using the system-GMM estimator. Importantly, we control separately for the tariffs on capital goods, intermediate inputs and final goods, which allows us to estimate the price elasticity of investment in foreign capital goods. Consistent with theory, we find that reductions in the tariffs on capital goods, and intermediate inputs led to higher investment in foreign capital goods, whereas reduction in the output tariff resulted in lower investment. The impact of the capital goods tariffs is the largest. [ABSTRACT FROM AUTHOR]

The relationship between foreign direct investment and domestic investment is intriguing. An important question arises - does foreign direct investment crowd in or crowd out domestic investment? This paper examines this nexus in the post-1991 period in India, which is also considered as the post-reform period. It is during this era; the above-mentioned topic gains more impetus as the economy opened up for further foreign inflows. The time period taken for the paper was from 1990-91 to 2014-15. The data series were checked for stationarity and the presence of long run relationship between foreign direct investment and domestic investment was analysed using cointegration test. Thereafter, the vector error correction model was estimated. The results clearly show that foreign direct investment crowds out domestic investment in India in the post reform period. The findings have significant policy implications because there is a substituting relationship between foreign direct investment and domestic investment in India. [ABSTRACT FROM AUTHOR]

Trade is one of the factors that connect two distant places of the world. No single country can declare unilaterally that it is self sufficient in all its needs. If India needs technology, the US needs affordable IT human resource that runs their IT engines. Considering these things in mind, India and EU sought to enter into a Free Trade Agreement (FTA), called Broad-Based Bilateral Trade and Investment Agreement (BTIA) since 2007. However, there are certain hurdles in the finalisation of this instrument. Certain provisions of this instrument have been criticised as being TRIPS-plus provisions. The author seeks to study and investigate to what extent such provisions are against interest of India and the relevant provisions of the draft BTIA that are criticised to be TRIPS-plus arrangements. [ABSTRACT FROM AUTHOR]

Lately International Commercial Arbitration has witnessed a remarkable development in the contribution of Third-Party funders not only in litigation but also in in arbitral proceedings, raising queries regarding the legitimacy of TPF in international arbitral proceedings. Presently, more and more litigants are seeking to take advantage of external funding, "either because they lack the necessary funds to commence arbitration proceedings or because they want to maintain cash-flow and offset the risk of an uncertain outcome." Dispute resolution mechanism in India tends to be a cost-heavy proposition for the parties involved. And being the developing country India is now willing to open its door towards the outside funding practices in dispute resolution mechanism. The present discussion highlights the footprint of third party funding in trade liberalization and the governing principles of International Commercial Arbitration with reference to Indian Legal Policies. [ABSTRACT FROM AUTHOR]

The ASEAN‐inaugurated Regional Comprehensive Economic Partnership (RCEP) was eventually concluded on 15 November 2020 after 8 years of tough negotiations. India was counted as an important member of the RCEP, but it chose to back out when other members were finalizing the RCEP legal text. This article critically analyzes the relevant legal provisions leading to India's withdrawal from this significant mega trade deal, the reasons behind India's refusal of those provisions, the possibility of isolationism India might face, and geopolitical changes in Sino–India relations post stand‐off on the Galwan Valley as well as the COVID‐19 pandemic. It argues that unbalanced economic relations, India's self‐reliant ideology, as well as China's growing hegemony in the Asia‐Pacific region are among the principle factors for India to back out from the RCEP. However, the door to participate in the future remains open for India. [ABSTRACT FROM AUTHOR]

The study examines the role of trade agreements (TA) in determining merchandise export efficiency in India using the stochastic frontier gravity model. We estimate the impact of select trade agreements (bilateral, SAFTA, APTA, ASEAN, and MERCOSUR), regulatory quality, and FDI inflow on India's export efficiency in the period 2002 - 2018. Results suggest that TAs have enhanced India's merchandise export efficiency to its trading partners except for the MERCOSUR bloc. However, substantial potential is still untapped. The study finds that the regulatory quality (RQ) of importing nations does not enhance India's export efficiency. Moreover, the RQ of India is promising but not significantly promoting exports. The study suggests that India should further liberalize its existing trade agreements, harmonize and improve regulatory standards facilitating cross-border trade and export-oriented FDI, and undertake trade access to top-consuming markets to achieve its full export potential. [ABSTRACT FROM AUTHOR]