Characterising India’s Exports to the U.S.: The Post Liberalisation Dynamics

Abstract

India has experienced significant export growth over the past two decades and presently stands as the 10th biggest trading partner of the U.S. Using the U.S. trade data compiled by Robert Feenstra, the U.S. CPI data, and the NBER Manufacturing Productivity database, this empirical paper attempts to understand the anatomy of India’s exports to the U.S. between 1991 and 2006. In particular, we analyse how the allocation of industries in the export sector, skill intensity of products, product diversification, and contributions of new products have changed as India’s exports to the U.S. have grown. Our findings suggest that India has moved from traditional agricultural and raw material products toward exports of sophisticated manufaturing products that require greater skill to produce. Furthermore, our study finds that India has diversified in the range of products it is exporting to the U.S., with new products gaining an increased share in India’s export basket.

Keywords

• specialization
• diversification
• trade
• extensive margin
• intensive margin
• skill intensity.