A Comparative Analysis of India’s and China’s Export Structure

Abstract

China has achieved rapid export growth over time since the adoption of an open - door policy in 1978, India has started opening its economy in 1980s; particularly new economic policy was adopted in 1991. Though both the countries shared many common features in the beginning of the process of integration with the world economy like following the policies of import substitution and heavy industrialization etc., still India’s export growth has been modest than China’s export growth. Along with this India and China are viewed at par in terms of factor endowments and export specialization, with these similarities it becomes important to examine how the structure of exports of two countries differ. The paper examine and compare structure of exports in terms of export diversification, composition, degree of Intra-Industry Trade and comparative advantage of exports of India and China vis-a-vis rest of the world, along with it the level of competitiveness between India and China is also measured. The study uses various indexes to analyze export structure of India and China. The finding reveals that there are several differences between India’s and China’s export structure. In particular China’s exports is more diversified compare to India’s exports, but over time diversification of India’s exports is increasing. Comparing RCA of India and China at SITC-1 digit level which categorize total merchandize exports in ten commodity groups, India possess comparative advantage in six commodity groups whereas China enjoys only in three out of which two are common to both the countries as per 2014 analysis.