Examining Intra-Industry Trade between India & China: Is India on the Right Track?

Abstract

Massive growth in Industrialization and Gross Domestic Product (GDP) and a stronger relation between India and China have led to an increase in bilateral trade between the two countries. This paper examines the intensity of Intra-Industry Trade (IIT) between India and China using A-Index over a two-decade period (1999 to 2018). Further, the study examines trade patterns of commodities traded between the countries and how have they changed over the years. The study used data of 99 commodities and conducts a decade wise comparison. Recent developments and policy changes on the bilateral trade front between India and China have also been discussed. The research has important implications for policymakers, economists and business involved internal trade.