Trade Structure Among India, Sri Lanka and Bangladesh: An Investigation
Indian Journal of Economics, 96 (380), 59-91
Posted: 2 Oct 2017
Date Written: 2015
This paper explores the trade structure of three countries India, Sri Lanka and Bangladesh. First, the study revealed that the export structures are becoming similar. Second, the study revealed that export structures of these three countries (India, Sri Lanka and Bangladesh) are becoming similar competition in the world market is also becoming more intense. The trade specialisation index (2000-2011) shows that India has the more comparative advantage in 2000 instead of 2011, Bangladesh exports is the less specialized products and consequently facing more competition than India and Sri Lanka has the comparative advantage in SITC 62 (rubber manufactures] and SITC 33 (petroleum and petroleum products) in 2000 as well as 2011.
Intra-Industry trade between India, Bangladesh and Sri Lanka over the period 1975 to 2010 are investigated. The extent of intra-industry trade between India and Bangladesh in 1975 to 2010 was high in sector like, crude materials except fuels, food and live animals. Intra-Industry trade index for most of the industries experienced a deceleration over time. India's IIT index with Sri Lanka has declined in chemical, food and live animals, mineral fuels, lubricant and related industries. There is potential of trade between India and Sri Lanka in the food and live animals, beverage and tobacco, manufacture goods classified chiefly by material. India has clear export complementarity with Bangladesh and Sri Lanka since 2000. This result is quite expected because India is major trade partner of Bangladesh and Sri Lanka. Bangladesh and Sri Lanka, on the other hand, clearly lack of export complementarity with India and each other value of TCI is less than 40.
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