India's bilateral trade agreements and export competitiveness of agricultural commodities

Abstract

Regional Trade Agreements (RTAs) are important as they can create an economic impact on international businesses and influence global economic policies. The key objective of this study is to understand whether India's agricultural export competitiveness with its partners has improved after the creation of these Regional Trade Agreements. The study applies the Revealed Comparative Advantage (RCA) index to gauge the export competitiveness of India with its RTA partners. The data has been analyzed for products in the agriculture category – Animals (product codes (PCs) 01 to 05), Vegetables (PCs 06 to 15), and Food Products (PCs 16 to 24) – based on the Harmonized System (HS2) classification. Out of 164 cases of agricultural export competitiveness, 84 cases have shown statistically significant changes after the formation of the studied RTAs. Among these 84 cases, 31 have shown improvement in the RCA, and 53 have shown a deterioration of the RCA. Considering India's agricultural export competitiveness, the India–Thailand Free Trade Agreement (FTA) is the most beneficial, while the India–Singapore Comprehensive Economic Cooperation Agreement (CECA) and the India–Sri Lanka FTA can be treated as highly disadvantageous bilateral agreements. The results have trade policy implications for India and other developing nations that are in the process of negotiating for more RTAs.