Impact of Trade Liberalization on Import Demands in India: A Panel Data Analysis for Commodity Groups

13 Pages Posted: 7 Nov 2005

See all articles by Rajesh Mehta

Rajesh Mehta

India Habitat Centre - Research and Information System for Developing countries (RIS)

Ashok Parikh

University of East Anglia

Abstract

The objectives of this study are to examine the impact of liberalization on price elasticities of imports at a commodity level for broad commodity groups and at an aggregate level for the Indian economy over the period 1993-1997. Liberalization is implemented by reducing tariff and non-tariff barriers and relaxing exchange controls. The impact of tariffs and market based exchange rate is introduced in the import price of the commodity. Relative price (import/domestic) elasticities for each commodity group using panel data of six countries over five years are estimated. For the Indian economy, relative price elasticities for each of the years at an aggregate level using data for twenty commodity groups as observations are obtained and these show that the price elasticity tends to rise with the increase in liberalization when tariff rates are reduced.

Suggested Citation

Mehta, Rajesh and Parikh, Ashok, Impact of Trade Liberalization on Import Demands in India: A Panel Data Analysis for Commodity Groups. Applied Economics, Vol. 37, No. 16, pp. 1851-1863, September 2005, Available at SSRN: https://ssrn.com/abstract=835464

Rajesh Mehta

India Habitat Centre - Research and Information System for Developing countries (RIS) ( email )

Core 4B, 4th Floor, Lodhi Road
India Habitat Centre
New Delhi, Delhi 110003
India
91 11 4655437 (Phone)
91 11 4682173 (Fax)

Ashok Parikh (Contact Author)

University of East Anglia ( email )

Norwich, Norfolk NR4 7TJ
United Kingdom
+44 0 208 580 0661 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
179
Abstract Views
1,106
rank
203,914
PlumX Metrics