NSU Research Contributions
Title : Why did India Pull Out of Regional Comprehensive Economic Partnership (RCEP)? A Gravity Explanation of the Indian Puzzle
Authors : Gour Gobinda Goswami, Md. Rubaiyath Sarwar, Mostafizur Rahman, Dulal Chandra Panday, Ishrat Jahan Ishita, Tahmid Labib, Nartam Vivekanand Motiram
| Journal Title: Evergreen | Volume Number: 10 | Publication Year : 2023 | Issue Number: 3 |
| Index: scopus | Ranking: Q3 | ISSN: 2432-5953 | Publisher Name: Joint Journal of Novel Carbon Resource Sciences and Green Asia Strategy |
| Pages : 1140-1155 | |||
| Funding Source : None |
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Direct Sustainable Development Goals : SDG9 Industry, Innovation & Infrastructure |
Indirect Sustainable Development Goals : SDG9 Industry, Innovation & Infrastructure |
Sustainable Development Sub Goals : Develop quality, sustainable infrastructure Upgrade infrastructure and retrofit industries to make them sustainable |
| Impact statement: India’s decision to pull out from the Regional Comprehensive Economic Partnership (RCEP) was a surprise to analysts as RCEP is currently the most significant Free Trade Agreement (FTA). This paper examines the rationality of India’s decision. We used gravity set-up and Poisson Pseudo Maximum Likelihood (PPML) estimator to analyse India’s export and import data for nine sectors with 45 trading partners for the period 2001-2021. The results show that India’s exports are inelastic to tariffs, while India's imports are elastic to tariffs. Export remains positive despite the tariff on Indian exports, while import declines with the tariff imposed by India. This rationalizes India’s decision to pull. At the sectoral level, tariff elimination reduces India’s export of vegetables, food, minerals and chemicals, plastics, and plastic goods. However, tariff elimination increases India’s export of animal and animal food, leather, wood and wood products, textiles, and footwear. | Collaboration: Partner University | Keywords: India, China, FTA, Gravity Model, RCEP, PPML |
