Protectionism in Advanced Economies and Structural Transformation in Emerging Markets: Evidence from India’s Sectoral Export Competitiveness under U.S. Tariff Escalation

Agrawal Vijay
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Agrawal Vijay: Birla Institute of Technology, Mesra - Patna Campus

Journal of Economic Integration, 2026, vol. 41, issue 3, 547-568

Abstract: This research examines the evolution of India’s export competitiveness using the Revealed Comparative Advantage (RCA) and Trade Specialization Index (TSI) for the four critical sectors: Textiles, Footwear, Chemicals and Machinery and Electricals for the period 2013-2022. Using a longitudinal econometric model with sectoral feedbacks, the results show that trade specialization is associated with comparative advantage, although the effects are sector-specific. Chemicals and Textiles continue to show strong RCA, Footwear shows a negative specialization-competitiveness linkage, and Machinery and Electricals exhibit latent competitive potential that has not yet been fully realized. To these findings, the study simulates tariff forecast adjustments (2023-2027) after the U.S.-India tariff hike of August 2025, where punitive tariffs of 50-59% were placed on these sectors. The forecasts confirm that tariff shocks significantly erode competitiveness. Textiles and Footwear are predicted to decline sharply while Chemicals and Machinery are predicted to lose resilient structural strengths. The results indicate that comparative advantage is path dependent and externally constrained. Findings support diversification, value-added upgrading and resilient industrial policy for developing nations.

Keywords: Export Competitiveness; Revealed Comparative Advantage (RCA); Trade Specialization Index (TSI); Tariff Escalation; Sectoral Heterogeneity; India (search for similar items in EconPapers)
JEL-codes: F14 F15 O24 O53 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:023564

DOI: 10.11130/jei.2026003

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