Growth and Pattern of Intra-Industry Trade in Manufactures in India's Overall Trade: A Quantitative Analysis

Abstract

This paper analyses empirical evidences of growing volume of intra-industry trade in India during 1975-1992. Quantitative evidences show that trade in manufactured products has increased with rapid industrialisation leading to genesis of intra-industry trade. Measures of Grubel-Lloyd Intra-industry trade indexes for India s trade with the world, the Asian economies and the developed countries are calculated. It shows that India s intra-industry trade is more with the developed countries than with the developing countries. Also, we observe that burgeoning volume of intra-industry trade is positively associated with (i) per capita GNP; (ii) trade openness; (iii) share of manufacturing exports in total exports.