A Comparative Analysis of India’s Trade with China and USA during Post-WTO Period

Global economic, political, socio-cultural and strategic bonding is of utmost significance for the holistic development of any nation. Keeping in view the share and size of economies, ongoing trade war among India, China and United States to become world power, their stable triangular interconnectedness shall be the most important defining factor in the geo-political history of the twenty-first century which will usher the age of economic and infrastructural development, peace, and prosperity; not only is Asia-Pacific but also in the whole world (FICCI, 2011). India‘s relations with both USA and China witnessed ups and downs in many social, cultural, religious, military and economic dimensions. Today, India and the U.S. shares extensive cultural, strategic, military and economic interconnections. The history of Indo-US relations can be traced back to the year 1492, when Christopher Columbus discovered America in the course of his search for a new route to India. Moreover, the spiritual association between India and the United States reflected in the visit of Swami Vivekananda who introduced Yoga and Vedanta in America. Today US is India's second largest trading

India‘s relations with USA and China witnessed ups and downs in many social, cultural, religious and economic dimensions but the present study focuses particularly on India‘s bilateral trade with USA and China in the post-WTO period. In this study an attempt has been made to make a comparative analysis of India‘s trade with USA and China a comparative analysis of India‘s trade with USA and China during post-WTO period. Further to ease the analysis, India‘s trade has been analysed from pre and post-recession period view point also.

Parpiani (2018) analyse the India US trade relations under Trump regime. This discussion observed that an ongoing shift in the division of power and responsibilities between the legislative and the executive branches of the US government on the conduct of its foreign policy. Iqbal; Turray & Sami (2017) examine the empirical relationship between bilateral trade and economic growth of India with the US. The study pointed out that the economic reforms introduced in the year 1991, India has radically changed its trade relations with the United States. Singh (2017) pointed out that Indo-US relationship is to go back deep in the annals of the past which has evolved and taken shape through various up and down. The dissolution of the erstwhile Soviet Union has been an impetus for Indo-US relations. Vishal and Muthupandian (2015) considered the significance of Nathu la Pass to the economic progress of northeast India. The study concludes that the export potential using the Nathu La trade route is substantially high but has not been achieved so far. Dutt and Panwar (2015) tried to explore the potential for future trade. The authors have suggested that the focus of both the markets should be on enhancing the business volume by keeping a check on import and export duties. Singh and Santpal (2014) examine and compare bilateral trade between India and China to draw implications for trade and economic co-operation for future. The study revealed that principal items of India‘s exports to China are ores, slag, ash, iron and steel, plastics and organics chemical and cotton whereas electrical machinery and equipments and parts thereof dominated India‘s imports from China. Tyagi (2014) examine key issues associated with trade intensity, intra-industry trade and comparative advantage between India and China. The findings throw light on the burgeoning trade deficit of India vis-à-vis China, which have policy implications for potential trade and economic cooperation between the two developing economies. Wani and Dhami (2013) explore the ways to intensity of trade relations between India and China and investigate the opportunities which can be tapped for the mutual benefit of both the economies. The study concludes that the trends in the growth rate of China –India trade shows a huge potential. Nandi (2012) analyse Indo-U.S. Relations in the Post-Cold - War Period with fivefold objectives. The study revealed that though, the trade between the USA and India was relatively small before 1991; it has been raised sharply over the years. Chanda and Singhal (2008) analysed the viability of a Free Trade Agreement (FTA) in goods between India and China FTA covering only goods trade will not be beneficial to India.

Though there are many dimensions of India‘s relations with China and USA, yet the present study focuses specifically on India‘s trade with China and USA in the post-WTO period. In the proposed research the selection of countries India, China and USA has been made after considering various important factors like vast size of their economies, their increasing share in global trade, ongoing economic war to become global power, and their geo-political and geo-strategic importance to India. On the same line the selection of time period from 1995 to 2019 has been made after considering many important factors like announcement of LPG policies in India, formation of WTO, global economic recession etc.

After the analysis of literature, it has been found that there is a research gap in relation to India trade relations with China and USA during post-WTO period. Therefore, the present study is entitled as ―A Comparative analysis of India‘s trade with China and USA during post-WTO period‖.

The following objectives have been framed to carry out the present study. ► To analyse the changes in India‘s total trade during post-globalized period. ► To perform a comparative analysis of India‘s trade with China and USA during post-WTO period.

The following hypotheses have been developed for testing: H0 (1) = There is no significant change in India‘s exports during post-WTO period. H0 (2) = There is no significant change in India‘s imports during post-WTO period. H0 (3) = There is no significant change in India‘s exports to China during post-WTO period. H0 (4) = There is no significant change in India‘s imports from China during post-WTO period.

exports to USA during post-WTO period. H0 (6) = There is no significant change in India‘s imports from USA during post-WTO period.

Though there are many dimensions of India‘s relations with China and USA, yet the present study focuses specifically on India‘s trade with China and USA in the post-WTO period. Purposive sampling has been used for the selection of countries and period of study. The present study covers the period from 1995 to 2019 to analyse volume of India‘s trade with China and USA. The data has been collected from various secondary sources such as journals, magazines, newspapers, Annual reports of Reserve Bank of India, Annual issues of RBI bulletin, Annual reports of Government of India, Economic surveys of various years published by Government of India, various publications of International Monetary Fund, data bank of Export Import Bank and many more authentic online sources. The collected data has been edited, classified, tabulated and then analysis and interpretation has been performed with the help of various statistical and mathematical tools. The mathematical tools used include percentage & ratio and statistical techniques include mean, standard deviation, Skewness, co-efficient of variation, compound growth rate, trend analysis and t-test.

8. RESULTS AND DISCUSSION

Analysis of India‘s exports during post WTO period includes the analysis of total exports, exports to China and USA with the help of annual growth rate and average annual growth rate. A comparison of India‘s exports to China and USA has also been performed by comparing their proportion in India‘s total exports. The data has been also presented with help of charts. The detailed analysis has been explained as follows:-

Table 1.1 shows India‘s position of trade in post-WTO period from 1995-96 to 2018-19, from different perspectives. The analysis of India‘s exports in globalised period shows that the exports increased year after year except during 1998-99, 2001-02, 2009-10, 2012-13, 2014-15, 2015-16 and 2018-19. The year 2015-16 marked a significant decline in India‘s exports by 15.48 percent. Annual growth in exports was exceptionally high during 2000-01, 2004-05, 2007-08 and 2010-11, Average growth in India‘s total exports was 11.78 percent per anum. The table also indicates that India‘s exports to China followed a consistent rise except during 1998-99, 2008-09, 2012-13, 2014-15, 2015-16, and 2018-19. The years 2002-03 and 2004-05 marked an exceptional rise in India‘s exports to China by 107.52 and 90.04 percent respectively. Average annual growth of India‘s exports to China stood at 21.01 percent per anum which was close to double of average annual growth of total exports. India‘s exports to USA also encountered an increasing trend except during 2001-02, 2009-10, 2015-16 and 2018-19. The year 2011-12 showed maximum increase by 37.36 percent whereas 2001-02 depicted maximum decline by 8.51 percent. Average annual growth in exports to USA stood at 10.50 percent which is quite less than that of total exports and exports to China. The above analysis can be well understood with the help of figures presented below. Below figure 1.1 presents the trend lines of annual growth in India‘s exports to China and USA.

It can be observed from the above figure 1.1 that annual growth in India‘s exports to China as well as to USA followed a fluctuating trend, but exports to China continued to grow at a faster rate as compared to that of China. The years 2002-03 and 2004-05 marked an exceptional rise in India‘s exports to China.

Analysis of India‘s exports during post-WTO period includes the analysis of total imports, imports from China and USA with the help of annual growth rate and average annual growth rate. The detailed analysis has been explained as follows:-

Table 1.2 The analysis of India‘s imports in globalised period shows that imports increased year after year except during 2009-10, 2013-14, 2014-15, 2015-16 and 2018-19. Average imports for the study period valued at US 247716.4 dollars. Average annual growth stood 13.51 percent per anum. The period from 2001-02 to 2007-08 depicts a period where imports from China registered an exceptional growth. India‘s imports from China grew faster than the total imports in majority of the years under study period. Average imports from China valued at US 29248.71 dollars for the study period. Average annual growth stood 25.15 percent per anum which was greater than that of total imports. In context of 2012-13 and 2016-17 to 2018-19 whereas there has been found decline during the rest period. Annual growth of India‘s imports from USA has been found lower than that of total imports and imports from China. Average imports from USA valued at US 14532.64 dollars for the study period. Average annual growth stood 12.87 percent per anum which was lesser than that of total imports and imports from China. The status of India‘s imports from China and USA in post-WTO period can be well explained in the below figure.

Figure-1.2 shows the trend lines of annual growth of India‘s imports from China and USA in the post globalised period. Trend analysis of the above figure shows that although annual growth rate of imports from both China and USA moved more or less in the same direction but growth of India‘s imports remained quite higher than that of USA in majority of the years. Pre-recession period depicted an increasing pattern in India‘s imports from both countries which continued to reach at peak during 2007-08 but post-recession period showed a fluctuating pattern. Overall assessment of above figures revealed more fluctuations in imports from USA as compared to imports from China.

mean value of global exports stood at 68284.81 US dollars with standard deviation of 42422.07 US dollars during the pre-recession period whereas mean value of global exports stood at 277506.56 US dollars with standard deviation of 50232.47 US dollars during the post-recession period. The coefficient of variation was found 62.12 percent pre-recession period and 18.10 percent during post-recession period indicating more stability in exports during post-recession period. Further the compounded annual growth has been found at 15.9 percent and 4.2 percent during pre and post-recession period respectively indicating higher annual growth in exports during pre-recession period. The analysis of t-value shows that the null hypothesis H0 (1) is rejected. Hence, it can be concluded that there is a significant change in India‘s exports during pre and post-recession period. This analysis shows that India‘s exports have been significantly affected by the process of globalisation. Mean value of total imports stood at 92693.92 US dollars with standard deviation of 68759.72 US dollars during the pre-recession period whereas mean value of global imports stood at 421654.97 US dollars with standard deviation of 74809.83 US dollars during the post-recession period. The coefficient of variation was found 74.17 percent pre-recession period and 17.75 percent during post-recession period indicating more variation in imports during pre-recession period. Further the compounded annual growth has been found at 18.4 percent and 3.5 percent during pre and post-recession period respectively, indicating higher annual growth in imports during pre-recession period. The analysis of t-value shows that the null hypothesis H0 (2) is rejected. Hence, it can be concluded that there is a significant change in India‘s imports during pre and post-recession period. This analysis shows that India‘s imports have been significantly affected by the process of globalisation. The analysis of India‘s trade with China revealed that mean value of exports to china stood at 3381.74 US dollars with standard deviation of 3605.89 US dollars during the pre-recession period whereas mean value of exports to China stood at 13282.58 US dollars with standard deviation of 2974.05 US dollars during the post-recession period. The coefficient of variation was found 106.62 percent pre-recession period and 22.39 percent during post-recession period indicating more stability in exports during post-recession period. Positive value of Skewness during both pre and post-recession period indicates maximum variation in exports to china remained to the lower side of its mean value. Further the compounded annual growth has been found at 36.6 percent and 1.7 percent during pre and post-recession period respectively indicating higher annual growth in exports during pre-recession period. The analysis of t-value shows that the null hypothesis H0 (3) is significant change in India‘s exports to China during pre and post-recession period. This analysis shows that India‘s exports to China have been significantly affected by the process of globalisation. Mean value of India‘s imports from China stood at 6434.98 US dollars with standard deviation of 8252.69 US dollars during the pre-recession period whereas mean value of imports from China stood at 55063.45 US dollars with standard deviation of 14005.82 US dollars during the post-recession period. The coefficient of variation was found 128.24 percent pre-recession period and 25.43 percent during post-recession period indicating more variation in imports from China during pre-recession period. Further the compounded annual growth has been found at 38.00 percent and 7.3 percent during pre and post-recession period respectively, indicating higher annual growth in imports from China during pre-recession period. The analysis of t-value shows that the null hypothesis H0 (4) is rejected. Hence, it can be concluded that there is a significant change in India‘s imports from China during pre and post-recession period. This analysis shows that India‘s imports from China have been significantly affected by the process of globalisation. The analysis of India‘s trade with USA revealed that mean value of exports to USA stood at 11650.33 US dollars with standard deviation of 4935.43 US dollars during the pre-recession period whereas mean value of exports to USA stood at 36413.36 US dollars with standard deviation of 10113.29 US dollars during the post-recession period. The coefficient of variation was found 42.36 percent pre-recession period and 27.78 percent during post-recession period indicating more stability in exports to USA during post-recession period. Positive value of Skewness during pre-recession period indicates that maximum variation in exports to USA remained to the lower side of its mean value whereas negative value of Skewness during post-recession period indicates that maximum variation in exports to USA remained to the higher side of its mean value. Further the compounded annual growth has been found at 11.60 percent and 7.4 percent during pre and post-recession period respectively indicating higher annual growth in exports to USA during pre-recession period. The analysis of t-value shows that the null hypothesis H0 (5) is rejected. Hence, it can be concluded that there is a significant change in India‘s exports to USA during pre and post-recession period. This analysis shows that India‘s exports to USA have been significantly affected by the process of globalisation. Mean value of India‘s imports from USA stood at 6619.69 US dollars with standard deviation of 5317.99 US dollars during the pre-recession period whereas mean value of imports from USA stood at 24219.53US dollars with standard deviation of recession period indicating more variation during pre-recession period. Positive value of Skewness during both pre and post-recession period indicates that maximum variation in imports from USA remained to the lower side of its mean value. Further the compounded annual growth has been found at 15.70 percent and 5.4 percent during pre and post-recession period respectively, indicating higher annual growth in imports from USA during pre-recession period. The analysis of t-value shows that the null hypothesis H0 (6) is rejected. Hence, it can be concluded that there is a significant change in India‘s imports from USA during pre and post-recession period. This analysis shows that India‘s imports from USA have been significantly affected by the process of globalisation.

It can be concluded from this study that both India‘s exports and imports are increasing continuously year after year and with some exceptional annual growth during some years. India‘s exports to both China and USA followed a consistent rise and average annual growth of India‘s exports to China was almost double of average annual growth of total exports but average annual growth in exports to USA has been found quite less than that of total exports and exports to China. The share of India‘s exports to China remained more or less stable but share of India‘s exports to USA is increasing continuously. India‘s overall trade balance remained unfavourable and continued to rise during the whole study period except for few years. India‘s trade with China remained unfavourable but few years showed some improvements in India‘s trade with China whereas India‘s trade with USA remained favourable during whole study period except 2007-08. T-test evidenced a significant change in India‘s total exports and imports and that with China and USA during pre and post-recession period.

Chanda, Rupa, Chaitanya, AV Naga and Singhal, Pulkit (2008), ―India-China Free Trade Agreement (FTA): Viability, Prospectus and Challenges‖ Tejas article Dutt, Shailza and Panwar, Rajender Dev (2015) ―An Analysis of Indo-China Trade Trends (past & projected) in the Post-Liberalisation Era‖ Scholarly Journal fir Interdisciplinary Studies. ISSN 2278-8808 Vol. III/XVII, March April 2015, pp. 3228-3241 FICCI (2011), https://ficci.in/spdocument/20242/sep11-Background-Paper-India-US-Relations%202011.pdf. Transnational Corporations Review, ISSN: 1918-6444 (Print), 1925-2099 (Online) Journal homepage: http://www.tandfonline.com/loi/rncr20. Kumar K. Bharat (2018). Why does U.S. want India to Import more? Retrieved from, https://www.thehindu.com/business/Economy/why-does-us-want-india-to. Nandi, Debasish (2012), in the thesis ―Indo-U.S. Relations in the Post-Cold - War Period (1992-2006)‖, Department of Political Science, The University of Burdwan, Golapbag, Burdwan, Pin - 713104, West Bengal, India. Parpiani, Kashish (2018), ―India-US Relations Under Trump: Guarding against Transactionalism by Pivoting to the US Legislature‖ ORF Issue Brief, Issue 262, ISBN 978-93-88262-48-4, pp. 1-16. Singh, Balwinder (2017), ―Indo-US Strategic Relations in 21st Century‖, International Journal of Research – GRANTHAALAYAH, ISSN- 2350-0530(O), ISSN- 2394-3629(P), pp. 417-421. Singh, Joginder and Santpal (2014), ―A comparative study of India-China Bilateral trade‖ IRACST- Internationl Journal of Commerce Business and Management (IJCBM) ISSN No. 2319-2828, Vol. 3, No. 2 April 2014. Tyagi, Samar (2014) ―Composition, Intensity and revealed comparative advantage in Sino-Indian Bilateral trade: A preliminary Study‖ Institute of Chinese studies, Occasional paper Series: No. 8, Sept. 2014. Vishal,Ravi Shekhar and Muthupandian, B. (2015), ―India's Border Trade with China : Current Status and Potential of Trade route through Nathu La‖ Management Insight, School of Management Sciences, Varanasi ISSN 0973-936X, Vol. XI, No. 2; December 2015, pp. 32-41. Wani Nassir Ul Haq and Dhami Jasdeep Kaur (2013), ―Indo-China Trade: Intensity and Potential for Future Trade‖ International Journal of Enhanced Research in Educational Development (IJERED) Vol. 1, Issue 1, Feb. 2013. Xiao, Y., Zheng, X.D., Hu, L.Y. and Chen, Q.Y. (2015) ―Research on the Factors of Trade Growth between China and India— an Empirical Analysis Based on Constant

Science and Management, Issue-8, pp. 569-577.

Research Scholar, Department of Commerce, Himachal Pradesh University, Shimla