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Trade Compatibility between Afghanistan and India : An empirical Evaluation

Author

Listed:
  • Usman Ali

    (Kardan University)

  • Faizan Ahmad

    (Kardan University)

  • Lida Ormal

    (Kardan University)

Abstract

In order to expedite the flow of trade the number of regional trade agreements has grown among the countries since the globalization has started. The dramatic changes are quiet visible as these RTA are lucrative and attractive for the countries to manage their trade. Afghanistan started its regional trade with neighboring countries after joining SAARC in 2008. The study period is covering 8 years data from 2008-2015 by employing SITC Revision III classification. The prime focus of this article is to evaluate the trade compatibility between Afghanistan and India by employing Revealed Compara¬tive Advantage (RCA) and Trade Intensity Index (TII). From the results it is quite clear that the trade between two countries is proceeding in India’s favor. Afghanistan enjoys comparative advantage in just one product category and for the rest of the products the values of RCA are less than 1. India enjoys RCA in four product categories. The paper concludes with this recommendation that it will be better for both countries to keep promoting the export of the products which has the RCA ? 1. India is leading the existing export market because of its strong export base. Both countries should strive to improve their export potential products, in order to gain the market and to be compatible and competitive partners with one another.

Suggested Citation

  • Usman Ali & Faizan Ahmad & Lida Ormal, 2018. "Trade Compatibility between Afghanistan and India : An empirical Evaluation," Kardan Journal of Economics and Management Sciences, Kardan University, Department of Economics, vol. 1(1), pages 11-12, January.
    • Handle: RePEc:kar:journl:v:1:y:2018:i:1:p:11-12
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    References listed on IDEAS

    as
    1. Balassa, Bela, 1977. "'Revealed' Comparative Advantage Revisited: An Analysis of Relative Export Shares of the Industrial Countries, 1953-1971," The Manchester School of Economic & Social Studies, University of Manchester, vol. 45(4), pages 327-344, December.
    2. Amita Batra & Zeba Khan, 2005. "Revealed comparative advantage: An analysis for India and China," Indian Council for Research on International Economic Relations, New Delhi Working Papers 168, Indian Council for Research on International Economic Relations, New Delhi, India.
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    More about this item

    Keywords

    Afghanistan; India; Trade Policy;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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