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India–Sri Lanka Bilateral Trade

Author

Listed:
  • Chandrima Sikdar

    (Chandrima Sikdar is Assistant Professor, Indian Institute of Foreign Trade, IIFT Bhawan, B-21, Qutab Institutional Area, New Delhi 110016, India. Email: sikdarc@rediffmail.com; chandrima@iift.ac.in)

Abstract

The India–Sri Lanka Free Trade Agreement (ISFTA) was signed between India and Sri Lanka in December 1998 and came into operation in March 2000. It is now 10 years since this FTA has been signed and during this period the bilateral trade between these two economies has reached new heights and dimensions. Against this backdrop the present article proposes a theoretical framework which provides a general equilibrium determination of the commodity pattern of trade between the economies that helps to isolate their pattern of comparative advantages. The empirical implementation of the model considers trade in 33 sectors comparable in the input–output tables of the economies. The study isolates the gains from free trade accruing to either economy. The article also explores the pattern of bilateral trade when each economy has a choice to produce goods by utilizing its own or the other country’s technology.

Suggested Citation

  • Chandrima Sikdar, 2010. "India–Sri Lanka Bilateral Trade," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 11(2), pages 155-180, September.
    • Handle: RePEc:sae:soueco:v:11:y:2010:i:2:p:155-180
    DOI: 10.1177/139156141001100201
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    References listed on IDEAS

    as
    1. Thijs ten Raa & Pierre Mohnen, 2009. "The Location of Comparative Advantages on the Basis of Fundamentals Only," World Scientific Book Chapters, in: Input–Output Economics: Theory And Applications Featuring Asian Economies, chapter 23, pages 425-446, World Scientific Publishing Co. Pte. Ltd..
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    General equilibrium; comparative advantage; bilateral free trade; India–Sri Lanka; JEL: F1; JEL: F11; JEL: F15;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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