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Assessment of Possible Economic Alignment Between G20 Nations with Special Focus on India, G7 and G12: A General Equilibrium Analysis

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  • Archana Srivastava

    (Archana Srivastava is Associate Professor, Department of Economics & Finance, Birla Institute of Technology & Science (BITS), Pilani, Hyderabad Campus, Jawahar Nagar, Shamirpet, Hyderabad, India.)

  • Somesh Kumar Mathur

    (Somesh Kumar Mathur is Professor, Department of Economics Sciences, Indian Institute of Technology Kanpur (IITK), India.)

  • Rachna Mathur

    (Rachna Mathur Assistant Professor at Shaheed Bhagat Singh College, University of Delhi, Delhi, India.)

  • Prabir De

    (Prabir De is Professor, Research and Information System for Developing Countries (RIS), New Delhi.)

Abstract

The article analyses the ex-ante effects of India’s possible alignment with G20 countries. The study considers G7, G12 and G20 countries as separate blocks. The study analyses India’s bilateral tariff and non-tariff liberalisation, free flow of factors of production, Global Value Chain (GVC) participation, output-oriented technological progress in manufacturing, transport and communication and the introduction of shipping technology in India. The study considers liberalisation in G7 standalone, G12 standalone, G20 standalone and also G20 comprehensive liberalisation. The study also considers India’s bilateral standalone liberalisation with G7, G12 and G20 countries separately using computable general equilibrium (CGE) analysis with the help of the Global Trade Analysis Project (GTAP) 10 database. The overall results indicate that strengthening of GVC standalone in the G20 region may bring maximum welfare to the region. Further, the sectors which may gain the most seem to be grain crops, meat and meat products, textiles and apparel, etc., and in terms of factors of production, all other factors of production would gain but land and natural resources seem to lose in terms of real returns to factor of production. Addressing issues related to factor movements and policies strengthening GVCs can bring about relatively higher growth and welfare, respectively, in the G20 nations as compared to other trade and industrial policies.

Suggested Citation

  • Archana Srivastava & Somesh Kumar Mathur & Rachna Mathur & Prabir De, 2023. "Assessment of Possible Economic Alignment Between G20 Nations with Special Focus on India, G7 and G12: A General Equilibrium Analysis," India Quarterly: A Journal of International Affairs, , vol. 79(4), pages 535-551, December.
    • Handle: RePEc:sae:indqtr:v:79:y:2023:i:4:p:535-551
    DOI: 10.1177/09749284231203329
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    References listed on IDEAS

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    1. Yasushi Kawabata, 2014. "The effects of cross-regional free trade agreements under a vertical industry structure," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(6), pages 906-922, September.
    2. Andrea Goldstein & Alessia Amighini & Bernard Hoekman, 2016. "Revitalizing the Global Trading System: What Could the G20 Do?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(4), pages 34-54, July.
    3. Kawabata, Yasushi, 2015. "Endogenous formation of free trade agreements in vertically related markets," Research in Economics, Elsevier, vol. 69(2), pages 214-223.
    4. Kawabata, Yasushi & Yanase, Akihiko & Kurata, Hiroshi, 2010. "Vertical trade and free trade agreements," Journal of the Japanese and International Economies, Elsevier, vol. 24(4), pages 569-585, December.
    5. Sikder, Arjita & Inekwe, John & Bhattacharya, Mita, 2019. "Economic output in the era of changing energy-mix for G20 countries: New evidence with trade openness and research and development investment," Applied Energy, Elsevier, vol. 235(C), pages 930-938.
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