Data Analytics Reports

The country specific trade concentration indices of India and its major trading partner reveal that in comparison to its major eastern trading partners India’s export concentration has shown a declining trend with the only exception of China P RP which all through has maintained a more diversified export basket compared to India.

Similar comparison with India’s western major trading partners shows that apart from United Arab Emirates, all the major trading partner has low export concentration index with Germany being the lowest.

Export Concentration Index at Bilateral level-

The concentration level of the export basket at the bilateral level throws up some valuable insights in nature of the bilateral trade. As for India’s bilateral export concentration with its major trading partners it is noticed that in bilateral trade with USA, UK and U A E, India’s export concentration is much lower compared to these trade partners which indicates that India exports a varied set of commodities to these countries as compared to corresponding imports from these countries. Again in respect of China P RP, Hong Kong, India has exhibited a higher concentration compared to these trading partners though in case of China P RP the difference in export concentration has narrowed down. India’s bilateral export concentration with Germany has shown a marked shift since 2016 wherein Germany has shown a more diversified export portfolio compared to India.

Export Similarity Index-

The export similarity Index between two countries measures the extent of resemblance of export basket of the countries. The export similarity index values of India with its major trading partners reveal that in respect of commodities exported India’s export basket is not very similar to its major trading partners.

2.TRADE COMPLEMENTARITY AND INTENSITY-

Trade arises when two countries have a complementarity of needs – what one country has to sell is needed by the other country and vice versa. When two countries come to the world market with the same basket of exports and the same set of needs, there is little possibility of trade between them. The extent of complementarity of needs is measured by the Trade Complementarity Index (TCI). This is explained in Methodology. It is expected that higher the TCI, the higher will be the trade between two countries.

Tables 4A and 4B show the countries with which India has the highest and lowest trade complementarities, respectively (The ranking is done as per 2016 data).

                                                                                                      TABLE 4A

                                                                                                         TABLE 4B

From Tables 4A and 4B, a fact seems to emerge – India has the largest complementarities of trade with developing, and in many cases, backward economies. The smallest complementarities are with more developed countries generally. This points to the greater similarity of India’s export and import baskets with those of more developed countries than with those of more backward countries. This is a welcome sign, but there is a possibility that this may result in large trade flows with low-income economies. This can be averted if intra-sectoral complementarity with large markets can be increased. There is a voluminous automobile trade between Germany and Japan, both large and competent producers of the product, because there is a lot of complementarity among demand and supply of various types and qualities of automobiles manufactured by the two countries.

Whether India’s exports to a particular country are sufficiently high depends on the Trade Intensity Index between India and that country (explained in Methodology). Tables 4C and 4D show the countries with which India has the highest and lowest trade intensities, respectively (The ranking is done as per 2016 data).

                                                                                                             TABLE 4C

                                                                                                         TABLE 4D