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Doha Round Impacts on India: A Study in a Sequential Dynamic CGE Framework

Author

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  • Raihan, Selim
  • Khondker, Bazlul Haque

Abstract

The objective of this research has been to examine the impact of Doha round negotiations on the economy of India. This research looked into the impact of agricultural trade liberalisation and the impact of NAMA negations under the Doha negotiations, the combined effects of agricultural and NAMA negotiations, and the impact of liberalisation of the domestic services sectors. With a view to addressing these important issues, this study has examined the effects of the Doha agreement for India in a sequential dynamic computable general equilibrium (CGE) framework. A Social Accounting Matrix for the year 2006 has been used as the database. The major findings of these exercises suggest that agricultural liberalization under the Doha round would have very little effect on Indian GDP. The welfare effects are positive and the effects are stronger in the long run. Poverty falls for all household categories both in the short and long run. In sum, the agricultural trade liberalization would generate positive outcomes for the Indian economy. The NAMA scenario would lead to a rise in real GDP despite the fact that a number of manufacturing sector would contract. This is because of the more than offsetting effect of the expansion of textiles as well as some services and agricultural sectors. Poverty indices would rise for all household categories and the households relying more on non-agricultural capital income as well as on unskilled labour income would experience higher incidence of poverty. In sum, the NAMA scenario would lead to some negative outcomes for the Indian economy. The full Doha scenario would lead to rise in real GDP in the short run and the effect is stronger in the long run. In the short run, the aggregate welfare declines. However, in the long run the negative effect on welfare appears to be very minimal. In sum, the Doha scenario would lead to a mixed results.

Suggested Citation

  • Raihan, Selim & Khondker, Bazlul Haque, 2010. "Doha Round Impacts on India: A Study in a Sequential Dynamic CGE Framework," MPRA Paper 37897, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:37897
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    References listed on IDEAS

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    1. Hertel, Thomas W. & Kym Anderson & Joseph Francois & Will Martin, 2002. "Agriculture and Non-Agricultural Liberalization in the Millennium Round," GTAP Working Papers 235, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    2. Jung, Hong-Sang & Thorbecke, Erik, 2003. "The impact of public education expenditure on human capital, growth, and poverty in Tanzania and Zambia: a general equilibrium approach," Journal of Policy Modeling, Elsevier, vol. 25(8), pages 701-725, November.
    3. van Tongeren, Frank W. & van Meijl, Hans, 2006. "Multilateral Trade Liberalisation and Developing Countries: A North-South Perspective on Agriculture and Processing Sectors," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25462, International Association of Agricultural Economists.
    4. Francois, Joseph & van Meijl, Hans & van Tongeren, Frank, 2003. "Trade Liberalization and Developing Countries Under the Doha Round," CEPR Discussion Papers 4032, C.E.P.R. Discussion Papers.
    5. Diao, Xinshen & Somwaru, Agapi & Roe, Terry L., 2001. "A Global Analysis Of Agricultural Trade Reform In Wto Member Countries," Bulletins 12984, University of Minnesota, Economic Development Center.
    6. Dimaranan, Betina V. & Hertel, Thomas W. & Keeney, Roman, 2003. "OECD Domestic Support and the Developing Countries," 2003 Annual meeting, July 27-30, Montreal, Canada 22000, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. John C. Beghin & David Roland-Holst & Dominique van der Mensbrugghe, 2002. "Global Agricultural Trade and the Doha Round: What are the Implications for North and South?," Center for Agricultural and Rural Development (CARD) Publications 02-wp308, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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    Cited by:

    1. Raihan, Selim & Khondker, Bazlul Haque, 2010. "Backward and Forward Linkages of the Textile and Clothing Industry in India, Bangladesh and Pakistan," MPRA Paper 41231, University Library of Munich, Germany.

    More about this item

    Keywords

    WTO Doha Round; NAMA; Agricultural Trade Liberalisation; Dynamic CGE; India;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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