India's Intra- Industry Trade Under Economic Liberalization: Trends and Country Specific Factors

This paper focuses on two aspects of India’s intra-industry trade (IIT) in manufactured commodities under economic liberalization. First, it examines the changes in the intensity of multilateral IIT as between 1987-88, 1994-95 and 1998-99 to understand the impact of trade liberalisation on IIT. Second, within the theoretical framework of vertical IIT, it analyzes the influence of various country specific factors on the intensity and the probability of IIT in India’s bilateral trade with her major trading partners. The findings confirmed the hypothesis that trade liberalization biases trade expansion towards IIT. [Working Paper No. 313]