A Roadmap to India Liberalizing With Major Economic Groups

A Roadmap to India Liberalizing With Major Economic Groups

Somesh Mathur, Sachin Kumar Angural
Copyright: © 2021 |Pages: 43
DOI: 10.4018/978-1-7998-7568-0.ch015
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Abstract

This chapter aims to look at various existing international economic cooperation groups and analyze the impact of India liberalizing with each of them using the GTAP model. This chapter aims to discuss each of these economic groups composition and identify the key sectors they are specialized in. Further, they analyze the product aggregations in which India and these groups would benefit if we liberalize with them. This chapter looks at different linear and nonlinear methods while performing the simulations and compares them. The chapter looks at the different scenarios with (1) India reducing tariff by 10%, (2) both Indian and the economic group reducing tariff by 10%, (3) both reducing the tariffs to 0%. The chapter then further looks at the impact of each cooperation liberalizing with India in terms of terms of trade (ToT), trade balance, and import and export quantities. Thus, this chapter attempts to get some insights into what product aggregates would be beneficial for India and the economic groups and therefore build a roadmap for the same.
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Data And Methodology

This paper refers to the GTAP 10 database for the data and performing the simulation scenarios. It considers the following scenarios for setting up the liberalization conditions between India and the various economic groups:

  • 1.

    CASE1: 10% reduction in tariff by India, nothing by groups in consideration

  • 2.

    CASE 2:10% reduction in tariffs by both India and the group countries

  • 3.

    CASE 3: Both India and group countries reducing tariffs to 0%

For each of the scenarios above, the paper discusses the impact on:

  • 1.

    Prices

  • 2.

    Balance of Trade

  • 3.

    Welfare related terms like TOT, EV, etc.

  • 4.

    Goods with maximum benefits for both India and group countries

The paper covers the following economic groups for which the aforementioned cases have been considered:

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