INDIA'S TRADE POTENTIAL WITH CENTRAL ASIA: AN APPLICATION OF GRAVITY MODEL ANALYSIS

In: International journal on world peace, Band 31, Heft 3

Abstract

In this paper, basic and augmented gravity model has been applied to estimate India's trade potential with Central Asian States. Panel data for the period 2000-2012 is employed in the analysis. The coefficients obtained from the gravity equations are then used to predict trade potentials between the regions. Results reveal that India's trade potential is tremendous with this region, and currently there are few geo-political issues that hinder the pathways of trade between the two regions. Specifically, the political tensions in neighbouring countries, particularly Pakistan and Afghanistan, are the major hindrances. In this context, therefore, both regions should look at ways and means to further improve their trade relations. Revival of historical and cultural links between India and Central Asian republics may prove positive in boosting bilateral trade. Adapted from the source document.