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India’s Export Potential to Other SAARC Countries: A Gravity Model Analysis

Author

Listed:
  • Sandeep Kaur
  • Paramjit Nanda

    (Centre for South and Central Asian Studies,School of Global Relation,Central University of Punjab, Bathinda-151001 India)

Abstract

India’s export potential to other SAARC nations (Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka) was calculated with the help of gravity model of exports using panel data methodology (pooled model, fixed effect model and random effect model) by taking the time period 1981-2005. To find out the convergence and divergence of India’s exports to SAARC members, speed of convergence was used. Moreover, study has also tried to find whether there is convergence of the actual data towards the estimated equilibrium. The study reveals that there was presence of convergence in India exports with SAARC countries and in the other words, actual India’s exports to SAARC countries converged towards the estimated export potential. Among SAARC countries, India’s export potential exists for Maldives, Bhutan, Pakistan and Nepal. India is the only SAARC member that shares land border with four members and sea border with two. No other SAARC country shares a common border with each other. In terms of trade, commerce, investments etc., India is a source of potential investment and technology and a major market for products from all other SAARC members. Therefore, it is essentially in India’s interest to put her weight behind SAARC.

Suggested Citation

  • Sandeep Kaur & Paramjit Nanda, 2010. "India’s Export Potential to Other SAARC Countries: A Gravity Model Analysis," Journal of Global Economy, Research Centre for Social Sciences,Mumbai, India, vol. 6(3), pages 167-184, June.
  • Handle: RePEc:jge:journl:632
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    Cited by:

    1. repec:eaa:aeinde:v:17:y:2017:i:2_11 is not listed on IDEAS
    2. Sultan, Maryam & Munir, Kashif, 2015. "Export, Import and Total Trade Potential of Pakistan: A Gravity Model Approach," MPRA Paper 66621, University Library of Munich, Germany.
    3. Lotfali Agheli & Unes Salmani & Mir Abdullah Hosseini, 2017. "Factors Affecting Market Share of Iranian Hand-woven Carpet in Singapore," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 500-505.

    More about this item

    Keywords

    international trade; gravity model; distance; SAARC;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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