Economic Studies - Research Publications

Permanent URI for this collectionhttps://kr.cup.edu.in/handle/32116/141

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DYNAMICS OF STRUCTURAL CHANGES IN INDIA’S EXPORTS, 1980-2016
(Central University of Punjab, 2018) Fayaz, Mohd.; Bhatia, Sandeep Kaur
The international trade flows have been dramatically expanding due to the growing integration of the world economies and have experienced spectacular changes over the past few decades. For that reason, the present study attempts to examine the dynamics of structural changes in India’s exports over the 1980-2016 period. Through the analysis of trends and patterns of India’s merchandise exports, the study finds that there is a declining share of primary products while the share of manufactured goods and petroleum products have increased. Further, the analysis of the direction of India’s exports reveals diversification especially towards South Asia, Southeast Asia, and Africa during the study period. The current study also extends analysis of Indian exports in terms of technological intensity over the 1980-2016 period. The results show that the exports of all said emerging economies have a large technological base owing to their significant investments in R&D and open-door policies. While the figures of Indian exports also show a steady though slow technological upgradation from low-tech to medium and high-tech exports but when compared to the standards of these emerging economies, are low. Further the study employs Revealed Comparative Advantage (RCA) and Constant Market Share (CMS) analysis for the ten exports destinations namely OECD, EU, USA, OPEC, UAE, Africa, Asia, East Asia, South and Southeast Asia, and West and Central Asia. Results of RCA shows that India has a comparative advantage in the exports of primary products in the markets of OECD, EU, USA, iv and OPEC. While in the markets of UAE, Africa, South & Southeast Asia, and West and Central Asia, India has a comparative advantage in the exports of both primary and manufactured products. The analysis further observes that the maximum number of commodities with a comparative advantage among all the export destinations are concentrated in UAE, Africa and Asia (except East Asia). While the results of the Market Effect (ME) and Market Adaptation Effect (MAE) shows that Indian exports to OECD, EU, OPEC, Africa, and West & Central Asia are comprised of the products for which the demand is relatively slow. However, in the markets of UAE, USA, East Asia and South & Southeast Asia, India is specializing in the products for which the demand is strong and can adapt their export structure to changes in the market composition of their imports. Also the analysis of the determinants of high technology intensive and low technology-intensive exports have been carried out by through Johansen Cointegration test and Vector Error Correction Model (VECM). For high technology exports, the present study finds a direct and significant long-run relationship with the world demand, FDI and R&D. For low technology-intensive exports, the study finds a positive and significant relationship of FDI and industrial value-added while world demand is found to be negatively related, however, is not significant. Thus in the view of above findings, the present study suggests that there is a need to devise policies that would make a favourable environment for attracting more FDI to build absorptive capability so that the movement towards the production of high technology intensive products and thereby exports could be facilitated. Further, the results show that India has reasonably diversified its exports in South and Southeast Asia and West and Central Asia with gaining importance in the exports of non-traditional and technological based items. However, there is an ample scope to diversify its exports in the market of East Asia into the sectors where international demand is high and swelling.
An empirical analysis of growth determinants in India and South Korea: Possible lessons for India
(Asociacion Euro-Americana de Estudios del Desarrollo, 2017) Bhat, Gulshan Farooq; Bhatia, Sandeep Kaur; Bhat, G.F.; Bhatia, S.K.
Since the second half of the twentieth century, most imperative experience in the rise of the global economy had been the upswing of East Asian industrializing countries including South Korea. The spectacular sociopolitical and economic revolution of South Korea in the last few decades made it a development model worth replicable. The study advances the theoretical and empirical research on the role and performances of major sectors and indicators in India and South Korea and to find out the possible lessons for India. The comparative analysis identified that India lags behind as a wide gap emerges between systematic quality, management and development expenditures of various important sectors including Education, R&D and some other correlated sectors including corruption. Korea made an impressive and enormous strides in the fields, especially Capital formation, Manufacturing, Trade mainly exports and Innovation (R&D), controlling red tape, which in turn helped them a great deal in the overall development. The empirical study makes it that Education, Trade, Manufacturing, R&D that augmented the development process in Korea and made it a replicable model, may also prove the same for India if followed sensibly.
India-Pakistan Trade: Problems, Prospects and Challenges
(Central University of Punjab, 2018) Manisha; Bhatia, Sandeep Kaur
The economic cooperation has been challenging in the South Asian Association for Regional Cooperation (SAARC) region. Due to the political conflicts between India and Pakistan, development of the South Asia has been on hold. The present study is an attempt to see the historical and economic linkages between India and Pakistan and to overview the impact of the bilateral trade between India and Pakistan from the perspectives of both the countries. The findings of the study reveal that both the countries’ trade has been fluctuating during the study period of 1981- 2015. To investigate the competitiveness of India and Pakistan trade in the top twenty commodities, different trade indices like Revealed Comparative Advantage, Reveled Symmetric Comparative Advantage, Intra-Industry Trade, Trade Complementarity Index, Trade Potential Index, and Herfindahl-Hirschman Index has been calculated. The empirical results of the study show that in the top twenty commodities, India has the maximum competitive strength in Organic Chemicals, Inorganic chemicals, Precious metal compound, isotopes, Ships, boats and other floating structures, Impregnated, coated or Laminated Textile fabric and Edible vegetables and certain roots and tubers while Pakistan has maximum strength in Ores slag and ash, Articles of apparel, accessories, knit or crochet, Organic chemical, Products of animal origin, nes, Mineral fuels, oils, distillation products, etc., Ships, boats and other floating structures and Articles of apparel, accessories, knit or crochet. The results of the Intra-Industry trade between India and Pakistan reveal that Wool, animal hair, horsehair yarn and fabric thereof, Vegetables textile fibers nes; paper yarn, woven fabric, Residues wastes of food industry shift from inter industry trade to Intra Industry trade in case of top export product of India. While in case of top exports products of Pakistan, Intra-Industry trade shows that Products of animal origin, nes, Articles of apparel, accessories, knit or crochet, Nuclear reactors, boilers, machinery, etc, Inorganic chemicals, precious metal compound, isotopes, Residues, wastes of food industry, animal fodder shift from inter industry trade to Intra Industry trade. The results of the study found that India has maximum export potential in Pearls, precious stones, metals, coins, etc. while Pakistan has in Inorganic chemicals, Precious metal compound isotopes. Some of the commodities of Pakistan has found reduced tariffs, increased comparative advantage led to increase the Intra-Industry trade also i.e. Ores, slag and ash, Mineral fuels, mineral oils and products of their, Special woven fabrics, tufted textile fabric lace, and Headgear and parts thereof has, indicating that these items gaining their trade competitiveness. While in case of India, commodities, namely Other vegetables, textile fibers; paper yarn and woven and Wool, fine or coarse animal hair yarn. A field survey was carried out in the month of August to November, 2016 at Wagah-Border (Amritsar). The investigation establishes that the security clashes, roaming facilities, infrastructure constraints, corruption and harassment, informal trade and Hawala payment are the primary Non-Tariff Barries. Betel Leaves, Dry Fruits, Wheat, Synthetic Fibers and Liquor have been informally traded from India via third route (Dubai). There should be some effective policy made by the government of both the countries to resolve the Kashmir Issue, Sir Creek, Water Dispute and Siachen Glaciers. There should be proper warehouse facilities, timely checking, more cargo facilities and open the other two gates at the Attari-Wagah border. The Indian government should introduce modern techniques to fast-track the import procedures, especially at the time of excessive security checks. Ministry of Communication should make some policy and agreement to reduce the telecommunication gap between the countries. Corruption and harassment at the land customs station should be checked at a high level. Security clashes at the border and political statement by India should be avoided for the smooth bilateral trade. For deeper and stronger trade linkages, it is important that the bilateral visa regime should be liberalized without compromising on security, and there is free flow of investments between the two countries. A joint working group includes officials from the Ministry of Finance, Ministry of Commerce, and the Central Bank should discuss policy measures that may incentivize the formalization of the current informal inflows from India to Pakistan in such a way that does not restrict the economic growth of formal trade between the countries. The Ministry of Finance of India should report, annual revenue losses to the informal trade.
Trends , Patterns and Determinants of Indian Current Account Deficit
(Euro-American Association of Economic Development Studies, 2016) Fayaz, Mohd; Bhatia, Sandeep Kaur
India’s current account experience deteriorated due to its large dependence on imports and un-competitiveness of exports. The relation between external and internal balances, with deficit in specific, deserves significant attention. Thus to understand the factors influencing current account is important for better designing the policies aiming at sustainable Current Account Deficit (CAD). In this direction, the present study is an endeavour to enrich the existing literature on the trends, patterns and determinants of current account deficit in India since 1996. The study adopts Johansen Cointegration approach to identify long-run relationship and uses Vector Error Correction Model (VECM) to identify short-run relationship. The results of Johansen Cointegration test indicates the existence of long-run equilibrium relationship between the current account and the variables of interest, implying that India’s current account is influenced by these factors. On the basis of the empirical results, study concluded that continuously increasing Net Foreign Assets (NFAs) will lead to the betterment of the current account while, increase in imports encompassing exchange rate deterioration will keep on mounting pressure on CAD of India.