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Impact of Trade Facilitation on Trade Intensity Index of India with South Asian Nations: A Panel Regression Analysis

Author

Listed:
  • Ayushi Dwivedi
  • Dinesh Yadav

Abstract

Purpose: This study examines the impact of India’s trade facilitation initiatives—measured by the Logistics Performance Index (LPI)—on India’s trade intensity with South Asian countries (Nepal, Afghanistan, Bhutan, Bangladesh, Maldives, Pakistan, and Sri Lanka) over the period 2010–2022. Trade intensity is assessed using the Trade Intensity Index (TII). Design/Methodology/Approach: The study employs a fixed-effects panel regression model with robust standard errors to estimate both aggregate and country-specific effects. The results indicate that improvements in India’s trade facilitation significantly enhance trade intensity with most South Asian nations, with Bhutan and Nepal exhibiting the strongest responses. Findings: Country-specific analysis reveals considerable heterogeneity in outcomes, driven by geographic proximity, economic structures, and geopolitical factors. The findings highlight the critical role of trade facilitation measures in strengthening intra-regional trade within South Asia. Practical Implications: The study underscores the pivotal role of India’s trade facilitation initiatives in enhancing bilateral trade intensity with South Asian nations. Policymakers should prioritize sustained investments in trade-related infrastructure, including digital customs systems and port efficiency, to further strengthen trade ties within the South Asian region. Originality/Value: By empirically linking trade facilitation performance to trade intensity in South Asia, this study contributes to the literature on regional trade integration. Extending the analysis to other regional blocs or longer time horizons could further validate the findings and inform strategies for deeper South Asian economic integration.

Suggested Citation

  • Ayushi Dwivedi & Dinesh Yadav, 2025. "Impact of Trade Facilitation on Trade Intensity Index of India with South Asian Nations: A Panel Regression Analysis," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 03-11.
    • Handle: RePEc:ers:ijebaa:v:xiii:y:2025:i:4:p:03-11
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    References listed on IDEAS

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    3. Yann Duval (ed.), 2008. "Trade Facilitation beyond the Multilateral Trade Negotiations: Regional Practices, Customs Valuation and Other Emerging Issues," STUDIES IN TRADE AND INVESTMENT, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), number tipub2466, January-j.
    4. Xing Yao & Yongzhong Zhang & Rizwana Yasmeen & Zhen Cai, 2021. "The impact of preferential trade agreements on bilateral trade: A structural gravity model analysis," PLOS ONE, Public Library of Science, vol. 16(3), pages 1-20, March.
    5. Raychaudhuri, Ajitava & De, Prabir, 2012. "International Trade in Services in India: Implications for Growth and Inequality in a Globalizing World," OUP Catalogue, Oxford University Press, number 9780198079378.
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    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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