China–India Merchandise Trade: Retrospect and Prospects

Anjali Tandon

No 104, NCAER Working Papers from National Council of Applied Economic Research

Abstract: This paper studies the changes in the pattern of bilateral trade between China and India consequent to China’s accession to WTO in 2001 and assesses the complementarities and challenges in trade.Using data for Harmonized System (HS) 1996 trade classification, this paper shows that the trade pattern has transformed over the years albeit with a continued high concentration in a few areas. Analysis shows that China reveals bilateral comparative advantage vis-à-vis India in exports of 29 commodities at 2-digit level. China’s bilateral comparative advantage vis-à-vis India is found to be consistent with international comparative advantage in as many as 47 products; and in 13 products both at bilateral and international levels. These belong to the export categories of textiles and textile products, ceramic products, and metals and their products. India is found to reveal bilateral comparative advantage in exports of only 16 products. Despite being internationally competitive, Indian exports in 26 categor es did not perform well in terms of bilateral competitiveness. Such poor performance could be attributed to restrictive and prohibitive policies adopted by China vis-à-vis India. Many of these belong to vegetable and textile products. Based on HS 2-digit level analysis, this paper identifies that the number of products with trade complementarities exceed the number of competing products.

Keywords: International Trade; Merchandise Trade; Exports; Imports (search for similar items in EconPapers)
JEL-codes: F14 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2012-03
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Persistent link: https://EconPapers.repec.org/RePEc:nca:ncaerw:104

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