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Ashok Kotwal
GST Explainer: Introduction
Posted on: 16 Oct 2017
Seventeen years after its framework was formed, India’s biggest tax reform – the goods and ... read on »
Introducing a new feature: ‘Explainers’
Posted on: 16 Oct 2017
Our day-to-day lives are tossed around due to economic changes, resulting sometimes from g ... read on »
On demonetisation
Posted on: 23 Dec 2016
On the evening of 8 November, the Prime Minister announced on national television that Rs. ... read on »
Introduction to e-Symposium: The GDP conundrum
Posted on: 16 Nov 2016
Ever since India’s Central Statistical Organisation came out with the new GDP series with ... read on »

Topic: Trade

Exporting and firm performance: Evidence from a randomised trial
David Atkin , Amit Khandelwal , Adam Osman
Posted on: 27/10/2017 09:25:19
Topics:   Trade


For a decade the field of international trade has revolved around the notion that exporters are particularly productive. Many policy interventions implicitly assume that exporting causes firms to become more productive, but such causal inference may be dubious. This column presents an experiment designed to verify the existence of learning-by-exporting. Experimental results and detailed observation vindicate this causal channel.
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Middleman margins and market structure in West Bengal potato supply chains
Sandip Mitra , Dilip Mookherjee , Maximo Torero , Sujata Visaria
Posted on: 22/09/2017 09:47:12
Topics:   Trade , Agriculture
Tags:   West Bengal


Potato farmers in West Bengal sell to local middlemen because they lack direct access to wholesale markets. Middleman margins are large and there is negligible pass-through from wholesale to farm-gate prices. Farmers are uninformed about downstream wholesale and retail prices. This column finds that providing farmers with wholesale price information has negligible average effects on farm-gate sales and revenues, but increases pass-through from wholesale to farm-gate prices.
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Could emerging economies change the rules of the global labour standards game?
Kuntala Bandyopadhyay
Posted on: 24/08/2016 09:27:58
Topics:   Jobs , Trade


In an increasingly global marketplace, the ramping up of trade has drastically altered the way goods are manufactured and sold. In this article, Kuntala Bandyopadhyay, research associate at ICRIER, discusses four processes and vectors through which emerging economies can shape global labour standards in a way that protects both their workers and the environment.
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A comparison of automobile industries in India and China
Smita Miglani , Saon Ray
Posted on: 05/08/2016 12:36:06
Topics:   Trade , Global Economy


The automobile sector in both India and China developed due to waves of investment in these countries since the late 1980s. This column discusses how India’s automobile sector has grown differently from that of other developing countries, especially China. In contrast to China, India has relied much more heavily on domestically-grown lead firms and has hence, benefitted at a slower pace from global best practices.
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Should the rupee trade with Russia be revived?
Pronab Sen
Posted on: 20/06/2016 09:25:00
Topics:   Trade
Tags:   Russia


The issue of revival of the bilateral rupee-denominated trade between India and Russia is back on the table after a break of over 20 years. This column contends that while there is justification for India’s hesitancy in reviving this trade, the prevailing conditions are such that it makes eminent sense for both sides - provided appropriate precautions are taken.
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What does China’s ‘new normal’ mean for India?
Sharmila Kantha
Posted on: 17/06/2016 10:28:58

China’s new normal – a growth rate of at least 6.5% - has been set as a target in its 13th Five Year Plan. In this article, Sharmila Kantha, Principal Consultant, Confederation of Indian Industry, contends that the potential implications of the Chinese deceleration for the Indian economy need to be analysed in detail.
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Indo-Korea trade pact: Harnessing the potential in services
Neetika Kaushal Nagpal , Saon Ray , Nisha Taneja
Posted on: 23/05/2016 09:34:16
Topics:   Trade


India and Korea signed a Comprehensive Economic Partnership Agreement (CEPA) in 2009, which resulted in an increase of 42% in bilateral trade between 2009-10 and 2012-13. This column examines the CEPA with the objective of identifying potential areas for harnessing services trade between the two countries.
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Does the India-EU trade pact make sense for India? - II
Swati Dhingra
Posted on: 29/04/2016 09:23:56
Topics:   Trade
Tags:   EU


In this article, Swati Dhingra, Assistant Professor of Economics at the LSE, contends that the proposed India-EU trade agreement is one-sided and would harm India’s economic interests. In her view, India should leverage its position as a regional power to extract a better deal.
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Does the India-EU trade pact make sense for India? - I
Devashish Mitra
Posted on: 28/04/2016 09:33:30
Topics:   Trade
Tags:   EU


During the 13th India-EU Summit in Brussels last month, leaders from both sides welcomed the re-engagement on the stalled India-EU Free Trade Agreement. In this article, Devashish Mitra, Professor of Economics at Syracuse University, argues that this trade pact is not a good idea from India’s point of view, and suggests a few alternatives to the current approach.
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Trade liberalisation and intergenerational occupational mobility in urban India
Reshad N. Ahsan , Arpita Chatterjee
Posted on: 18/04/2016 09:55:49
Topics:   Jobs , Trade


While the trade reforms of the 90s led to a rapid increase in trade in India, there are concerns regarding the likely impact of the reforms on inequality. This column shows that innovation induced by international trade led to an increase in the employment share of high-skill occupations, which in turn, allowed an increasing number of sons from underprivileged backgrounds to enter better occupations than their respective fathers.
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India-ASEAN economic linkages: Challenges and way forward
Deeparghya Mukherjee
Posted on: 10/03/2016 12:56:02
Topics:   Trade


India’s ‘Look East’ policy picked up steam with the conceptualisation of the Indian-ASEAN Free Trade Agreement in 2003. This column analyses the broad trends in India-ASEAN trade over the past decade, delves into the challenges involved in the economic relationship, and explores possible options for the way forward.
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Drug quality and global trade
Amir Attaran , Roger Bate , Aparna Mathur , Ginger Zhe Jin
Posted on: 18/09/2015 10:24:57
Topics:   Health , Trade
Tags:   Africa


There is a perception amongst pharmaceutical experts that some Indian manufacturers and/or their distributors segment the global medicine market into portions that are served by different quality medicines. This column finds that drug quality is poorer among Indian-labelled drugs purchased in African countries than among those purchased in India or middle-income countries. Substandard drugs – non-registered in Africa and containing insufficient amounts of the active ingredient – are the biggest driver of this quality difference.
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Creating a services value chain between India and Thailand
Tanu M. Goyal , Arpita Mukherjee
Posted on: 08/07/2015 15:19:15

In the past two decades, India has signed several bilateral and regional comprehensive free trade agreements with Southeast Asian countries, which are likely to enhance services trade, investment and cooperation in the region. This column explores the prospects for creation of a services value chain between India and Thailand. It contends that integrating services may facilitate growth in Indian manufacturing by supporting production networks.
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Assessing the economic effects of India ‘Looking East’
Ganeshan Wignaraja
Posted on: 22/05/2015 00:00:00

PM Modi recently said that India needs to move from ‘Look East’ to ‘Act East’ and that this is a key component of his government’s foreign policy. In this article, Ganeshan Wignaraja, an economist at the Asian Development Bank, assesses the impact of India’s ‘Look East Policy’ of 1991 on India-East Asia economic integration. He contends that closer ties with East Asia can lead to significant economic gains for India provided government and businesses work together to promote reforms and regional integration.
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Analysing net foreign earnings of India’s corporate sector
J. Dennis Rajakumar
Posted on: 22/04/2015 00:00:00
Topics:   Trade


The corporate sector is the linchpin of the ‘Make in India’ campaign. This column finds that the sector is increasingly relying on imported inputs and its net foreign earnings are on the decline, thus contributing to the country’s current account deficit. It suggests that ‘Make in India’ should emphasise domestic procurement of inputs and strengthen technological capabilities in the country.
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Getting more out of India’s ´Tourist Visa on Arrival´ scheme
Natasha Agarwal , Magnus Lodefalk
Posted on: 10/04/2015 00:00:00
Topics:   Trade
Tags:   tourism , FDI


The Government of India has extended the ‘Tourist Visa on Arrival’ scheme - now expected to be renamed ´Visa Online (ETA)´ scheme - from five countries in 2010 to 44 countries in 2014. In this article, Natasha Agarwal and Magnus Lodefalk highlight some of the limitations in the design and implementation of the scheme, and make recommendations for maximising its economic benefit and effectiveness.
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Boosting Indo-Pak agricultural trade
Ramesh Chand , Raka Saxena
Posted on: 02/04/2015 00:00:00
Topics:   Trade , Agriculture
Tags:   Pakistan


Despite close geographical proximity of India and Pakistan and implementation of SAFTA almost a decade ago, trade potential between the two countries remains largely unexploited. This column analyses trends in Indo-Pak trade in agriculture, which constitutes 43.6% of total Indo-Pak trade, and highlights opportunities for expanding trade in this sector.
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Mega-trading blocs: Where does India stand?
Sharmila Kantha
Posted on: 07/11/2014 00:00:00
Topics:   Trade
Tags:   WTO


Emerging multilateral trading agreements, resulting in mega-trading blocs, seem to be replacing global negotiations through the WTO. In this article, Sharmila Kantha assesses the potential impact of these trading agreements on India, and contends that Indian policymakers and businesses would need to factor them into their future plans.
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What explains the increasing use of contract workers in Indian manufacturing?
Bibhas Saha , Kunal Sen
Posted on: 29/10/2014 00:00:00
Topics:   Jobs , Trade


Contract workers constituted about one-fourth of all workers in formal manufacturing in India in 2008. This column analyses the extent to which trade liberalisation and lack of labour reforms explain the increasing use of contract workers. It finds that in the presence of labour rigidities, increasing import penetration contributes to the ‘flexibilisation’ of the workforce.
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International trade, domestic labour laws and India’s manufacturing sector
Devashish Mitra
Posted on: 22/09/2014 00:00:00
Topics:   Jobs , Trade


India has a multitude of restrictive labour laws and these have been found to adversely affect economic performance of manufacturing firms. This column illustrates how the impact of trade liberalisation on the domestic manufacturing sector depends on labour laws. It contends that more flexible labour laws will enable India to compete better in global markets.
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What impedes SMEs from joining Asian supply chains?
Ganeshan Wignaraja
Posted on: 01/09/2014 00:00:00
Topics:   Jobs , Trade


While Small and Medium Enterprises play a significant role in job creation at the country level in Asia, they are underrepresented in Asian supply chains. This column analyses data from 5,900 manufacturing enterprises from five Southeast Asian economies - Malaysia, Thailand, Indonesia, the Philippines and Vietnam - to assess the extent of and constraints on SME participation in Asian supply chains.
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Protectionism under the guise of food security
Ashok Kotwal , Milind Murugkar , Bharat Ramaswami
Posted on: 10/08/2014 00:00:00
Topics:   Trade , Agriculture


India has backed out of the commitment it made at the WTO negotiations in Bali in November 2013. The implicit explanation is that the government needs to accumulate food grain stocks to provide subsidised grain to the poor and ensure food security. In this article, Kotwal, Murugkar and Ramaswami critique this reasoning and India’s position on the issue.
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India’s WTO problem: A proposal
Arvind Subramanian
Posted on: 31/07/2014 11:45:26
Topics:   Trade , Agriculture


India is threatening to block the WTO Trade Facilitation Agreement unless its agricultural policies are exempted from multilateral scrutiny. This article contends that while India’s objectives on agriculture are valid, its tactics in withholding support for TFA are perhaps less so. India should withdraw its opposition, reformulate its position on agriculture to persuade others of its merits, and revisit the WTO issue in the near future.
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Impact of trade reforms on labour’s share of firm revenues
Reshad N. Ahsan , Devashish Mitra
Posted on: 25/07/2014 00:00:00
Topics:   Trade


The decline in labour’s share of national income in recent decades – a potential cause of rising inequality – has coincided with an increase in world trade. This column analyses the impact of trade reforms in India on labour’s share of total revenue at the firm level. It finds that the share of labour has been rising with reforms for small, labour-intensive firms.
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Turning to the pharmaceutical sector for enhancing India-Pakistan trade
Devyani Pande , Manoj Pant
Posted on: 23/07/2014 00:00:00
Topics:   Trade
Tags:   Pakistan


Various efforts have been made to normalise trade relations between India and Pakistan in the past few years; yet, several barriers remain. This column examines the trade potential in pharmaceuticals – a fast growing sector in world trade – between the two countries. It finds that there is huge, untapped potential in Indo-Pak pharmaceuticals trade, and suggests policy measures to propel trade and investment in the sector.
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Trade as aid
Ivan Cherkashin , Svetlana Demidova , Hiau Looi Kee , Kala Krishna
Posted on: 09/06/2014 09:42:34
Topics:   Trade


Preferential or duty/quota-free trade access to developing countries, as a form of foreign aid by developed countries, is considered to have both pros and cons. This column analyses data from Bangladesh’s apparel industry to show that it not only leads to gains for the access granting and access receiving countries, but also trade creation for the rest of the world.
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An Indian trade paradox
Arvind Subramanian
Posted on: 09/04/2014 00:00:00
Topics:   Trade


India’s trading partners often complain about the restrictiveness of India’s trade regime. This column argues that they are both right and wrong. While India´s economy is ‘closed’ in terms of trade policy, it is ‘open’ in terms of trade outcomes. Tariff barriers in the services sector are among the highest in the world; but given its size, India trades more than a typical country does.
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Proposing a solution for Indo-US ‘solar wars’
Saptak Ghosh
Posted on: 28/02/2014 00:00:00

India’s national solar programme mandates the use of domestically manufactured components in solar power installations in the country. The US has filed a WTO case against India, alleging that the policy discriminates against US exports. This column proposes a solution that would address the concerns of US as well as create a domestic market for solar products produced in India.
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Four Changes to trade rules to facilitate climate change action
Aaditya Mattoo , Arvind Subramanian
Posted on: 24/01/2014 00:00:00
Topics:   Environment , Trade


Global climate cooperation has collapsed but the need for action has not disappeared. This column argues that only radical technological progress can reconcile climate-change goals with development. It argues that four changes in WTO trade rules could facilitate climate-change action and technological advances without unduly damaging trade.
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Bali conundrum: WTO and Indian agriculture
Ashok Kotwal , Milind Murugkar , Bharat Ramaswami
Posted on: 15/01/2014 00:00:00

The outcome of the recent WTO meetings at Bali is a stopgap arrangement, which implies that the Indian government does not have to make any changes in the implementation of the new Food Security Act in the near future. In this article, the authors suggest disentangling consumer support and producer support via cash transfers so that India can build a safety net for its poor without violating WTO agreements.
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A suggestion for WTO negotiations
Ashok Kotwal , Milind Murugkar , Bharat Ramaswami
Posted on: 02/12/2013 00:00:00

India’s new food security law is likely to breach WTO’s limit on farmer support. India is keen to ask for a temporary exemption from the rule so that the law can be implemented unhindered. But, in return, it may have to agree on trade facilitation. This article argues that while our food procurement policies do need reform, there is no link between the food security law and free trade.
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Exchange rate movements and Indian firms’ exports
Yin-Wong Cheung , Rajeswari Sengupta
Posted on: 01/11/2013 00:00:00

Understanding the effects of exchange-rate changes on a country’s trade balance calls for an analysis of how exchange-rate fluctuations affect the decisions of individual firms. This column explores the effects of changes in the exchange rate on the share of exports of Indian non-financial sector firms.
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Exchange-rate pass-through by Indian and Chinese exporters
Sushanta Mallick , Helena Marques
Posted on: 15/04/2013 00:00:00
Topics:   Trade , Global Economy


How much does a change in the value of the rupee or the yuan affect the prices of exports from India and China? This column explores the factors behind this ‘exchange-rate pass-through’ and why it is different in the two countries.
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Caste dominance in rural India: Cause and effect
Siwan Anderson
Posted on: 16/08/2012 00:00:00
Tags:   rural India


Rural India remains a caste-based society. This column explores why caste continues to play such an important role and what the effects are. It argues that trade and agricultural productivity suffer, as well as the functioning of democracy.
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