Factors Affecting Trade Competitiveness of BRICS Countries

Objectives: To examine the trade competitiveness of BRICS countries (Brazil, Russia, India, China and South Africa) and position of India among BRICS countries.

Methods/Statistical analysis: The paper has used secondary data for 12 indicators (i.e. trade balance-GDP, exports-imports and trade balance-total trade ratio, RCA, share of manufactured export, other manufactured goods, machinery & transport equipment and chemicals in total exports, share in world merchandise exports, intra industry trade and exports-GDP and trade-GDP ratio). Trade competitiveness of BRICS countries was examined by applying technique of factor-analysis and composite index for the three points of time 1995, 2005 and 2015.

Findings: 12 indicators of trade competitiveness found the relative position of India among BRICS countries. India has experienced increase in share in world exports in 2015 and India has competitiveness in the exports of manufactured goods, chemicals and other manufactured goods among the BRICS countries. But India is not globally open economy as compared to China and its trade was found to be in deficit in all the study points. Based on 12 indicator of trade competitiveness, composite index found China as the most competitive country followed by Russia, South Africa and Brazil. India was found to be the least competitive country among BRICS countries.

Application/Improvements: As India could not improve its position among BRICS countries, there is a need to adopt import liberalization strategy for promotion of exports to reduce trade deficit. Further, Export-led growth strategy should be followed to increase exports.