 Dynamics of Price Transmission: Evidence from India’s Import BasketSonam Choudhry, Abhinav Narayanan and Anshul Foreign Trade Review, 2024, vol. 59, issue 2, 252-278 Abstract: This article uses granular information on trade flows between India and its trading-partners to estimate the impact of price changes on the import basket in general. We first investigate whether a change in world prices at the commodity level triggers a reorganisation of trading partners. Second, we examine the degree of transmission of world prices to Indian import prices. Lastly, we look at whether India imports less from countries that charge a higher markup on a product. Our results indicate that a change in world prices does not significantly change the set of importing countries. Using the country–product level price changes, we find a higher degree of transmission as compared to the world prices. This provides an important policy implication. In order to determine how the transmission of world prices to import prices works, we need to pay attention to the product price changes in the partner countries rather than focusing on the world prices. Lastly, we find that India imports less of a particular product on average from a country that charges a higher markup for that product relative to the average export prices charged by that country. JEL Codes: F14, F60, F02, Q27 Keywords: Price transmission; price differential; trade partners; India (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:fortra:v:59:y:2024:i:2:p:252-278 DOI: 10.1177/00157325231158848 Access Statistics for this article More articles in Foreign Trade Review |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.