The State of India’s Foreign Trade during the Post Reform Period:An Empirical Analysis
Objectives: The present study tries to throw light on the direction, nature, share and variation of India’s foreign trade with rest of the world during the post reform period.
Methods/Statistical analysis: An analysis of India’s balance of trade position is made at disaggregate level with different category of countries like OPEC, OECD, Eastern Europe, Developing countries and the other types of countries. A statistical analysis in the form of ANOVA is carried out for examining variation in the level of India’s export and import with rest of the world.
Findings: The empirical findings of the study show that though India is facing deficit balance of trade with rest of the world throughout the study period but the volume of trade deficit has widened mainly after 2002-03. India has enjoyed a trade surplus with OPEC, OECD, Eastern Europe, Developing countries and other type of countries during some points of time. The study has also found that India is having surplus balance of trade mostly with the developing and other type of countries. The study has also found that export and imports sharing of India among different countries are found statistically highly significant. The share of India’s export and import is also found to be shifted more towards developing and other type of countries in recent times and thus representing the dominance of these two countries in India’s current foreign trade situation. The findings of the present study are unique in the sense that it tries to analyse India’s balance of trade position by disaggregating the rest of the world into different groups.
Application/Improvements: The present study recommends that efforts must be put in raising India’s level of export to those countries where her products have relatively higher demand and she must look for some import substitution measures in case of those countries upon which she is heavily relying upon her import. The scope of improvement of the present study lies in exploring the causes of variation in the level of India’s foreign trade with the rest of the world.
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