Analysis of India’s trade patterns and trade possibilities with the European Union
Analysis of India’s trade patterns and trade possibilities with the European Union

Summary/Abstract: Trade has played a crucial role in the emergence of developing economies.The global emergence of India is also linked to its role in globaltrade. In this context, the European Union and India initiated talks fora free trade agreement known as the Bilateral Trade and InvestmentAgreement (BTIA). However, this agreement has failed to materialisedue to various challenges and disputes. Against this backdrop, thepresent study attempts to trace the existing pattern of trade relationsbetween India and the EU and provide a preliminary analysis of thenature of trade in this proposed region. A modified gravity equationand indicators of regional trade interdependence have been estimated.The results indicate that trade within this region is in line with certainpredictions of the gravity model. Additionally, it also indicates thatsuch an agreement has little potential for expanding trade and mighteven result in ‘unnatural trade’. Thus, it provides evidence for the argumentthat India can benefit from developing ties with similar emergingeconomies in the Asia-Pacific neighbourhood.

• Details
• Contents