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A STUDY ON INDIA’S BILATERAL TRADE WITH JAPAN
Corresponding Author(s) : Radha Raghuramapatruni
Humanities & Social Sciences Reviews,
Vol. 8 No. 4 (2020): July
Abstract
Purpose of the study: India and Japan share strong cultural and economic ties. The economic relationship between the two Asian giants strengthened with the signing of the CECA agreement during the year 2011. The current research would focus on assessing the bilateral trade relations between both the countries and attempts to identify the commodity trade potential to enhance the future trade between them.
Methodology: The study is based on secondary sources of data collected through the United Nations Conference for Trade and Development, WTO, IMF, RBI, and the Japanese Trade Databases. The annual data for the period 2005 to the year 2016 has been used to analyse the Intensity Indices and the Gravity Coefficient values between India and Japan. Similarly, the annual data from the year 2008 to 2015 is used to calculate the RCA and RID index values and finally, the average RCA and RID (2008-2016) are used for analysis to identify the commodity trade potential between both the countries.
Main Findings: The study concludes that the trade share of Japan in India’s overall trade has been falling significantly over the years which could be seen through the declining Export Intensity and Import Intensity Indices of India with Japan. However, the overall analysis presents that 28 commodities were feasible for trade between India and Japan from the 56 commodities computed for the study which exhibits a strong potential for enhancing future bilateral trade relations between both the countries.
Applications of this study: India had made a strategic move with its Look East Policy during the year 1991 to accelerate its trade relations with the East Asian countries and later with its success the same was transformed into Act East Policy during the year 2014. The current study would prove to be useful in shaping the policy changes in this direction.
Novelty/Originality of this study: The study focuses on the bilateral trade relations between the two important Asian giants, India, and Japan during the post comprehensive economic cooperation agreement between the two. Further, the study identifies the areas of commodity trade potential which paves the direction for new trade between the countries to tap the untapped trade potential.
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- Atrey, Priti. (2014). India-Japan Relations: Economic, Strategic and Security Co-operation. UGC Centre for Southeast Asian & Pacific Studies. D&Dee Publications, Hyderabad.
- Ambatkar, Sanjay. (2002). India and ASEAN in the 21st Century: Economic Linkages. Anmol Publications Pvt. Ltd, New Delhi.
- Brown, A.J. (1949). Applied Economics: Aspects of World Economy in War and Peace. London: George Allen and Unwin.
- Balassa, B. (1965). Trade Liberalization and ‘Revealed’ Comparative Advantage. The Manchester School of Economic and Social Studies 33, 92-133. https://doi.org/10.1111/j.1467-9957.1965.tb00050.x DOI: https://doi.org/10.1111/j.1467-9957.1965.tb00050.x
- Business Line. (2018). How India and Japan are Enhancing their Strategic Relationship. 14th December.
- Celine, Pejon. (2018). The Japan-India Economic Partnership: A Politically Driven Process. IFRI Centre for Asian Studies.
- Geethanjali, Nataraj., Ashwani. (2014). India-Japan Economic Partnership Agreement: Gains and Future Prospects, ORF Occasional Paper.50.
- Jayachandra, Reddy. (2014). India-Japan Relations: Economic, Strategic and Security Co-operation. UGC Centre for Southeast Asian & Pacific Studies. D&Dee Publications, Hyderabad.
- Kojima, K. (1964). The Pattern of International Trade among Advanced Countries. Hitotsubashi Journal of Economics. Vol.16, 613-636.
- Kumar, Nagesh. (2002). Liberalization and Japanese Foreign Direct Investments in India, Keshavan.K. V (eds), Building a Global Partnership: Fifty Years of Indo-Japanese Relations, Lancer Books, New Delhi.
- Kondo, Masanori. (2012). Japan-India Economic Relationship: Trends and Prospects. RIETI Policy Discussion Paper Series, 12-P-016.
- Leamer, E.L. (1984). Sources of International Comparative Advantage: Theory and Evidence, Cambridge Mass, MIT Press.
- Lam, Peng. Er. (2013). Japan’s Relations with Southeast Asia: The Fukuda Doctrine and Beyond? London: Routledge. https://doi.org/10.4324/9780203101551 DOI: https://doi.org/10.4324/9780203101551
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- Murthy, Narasimha P. A. (1993). India and Japan: Dimension of their relations [Economic and Cultural]. New Delhi: Lancer’s Books.
- Madhavan, A. (2000). The Post-Cold War Equations In India–Japan: Towards a New Era, edited by Kamlendra Kanwar. New Delhi: UBSPD.
- Maini, Tridivesh Singh. (2016). Japan’s Effort to Counter China’s Silk Road. www.theglobalist.com/japan-effort-to-counter-china-silk-road-india/.
- Mathur, Arpita. (2013). India-Japan Relations: Drivers, Trends and Prospects, Monograph 23. Singapore: RSIS.
- Mathew, Joseph., Subhasis, Bera. (2012). India-Japan and Investment Relations and Their Future Prospects. FCM (22), 225-242.
- Naidu, G.V.C.(2004). Whither the Look Ease Policy: India & Southeast Asia. Strategic Analysis, 28:2, 331-346. https://doi.org/10.1080/09700160408450136 DOI: https://doi.org/10.1080/09700160408450136
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- Observer Research Foundation. (2016). Challenges and Prospects of Japan’s Diplomacy – in the context of India-Japan Relationship. www.orf.org.
- Purnendra, Jain. (2017). Twin Peaks: Japan’s Economic Aid to India in the 1950s and 2010s, JICA Research Institute. No. 139.
- Rajamohan. P. G., Rahut, Dil Bahadur., Jacob, T. Jabin. (2008). Changing Paradigm of India-Japan Relations: Opportunities and Challenges. Indian Council for Research of International Economic Relations. Working Paper. No. 212.
- Raghuramapatruni, Radha. (2012). India’s Trade with the ASEAN Realities & Prospects. Abhijeet Publications, New Delhi.
- Rani, D. Mullen., Kashyap, Arora. (2017). India-Japan Brief. Centre for Policy Research. www.cprindia.org.
- Razeen, Sally., Rahul, Sen. (2012). Whither Trade Policies in Southeast Asia? The Wider Asian and Global context. ASEAN Economic Bulletin. 22(1), 92-115. https://doi.org/10.1355/AE22-1H DOI: https://doi.org/10.1355/AE22-1H
- Srabani Roy, Chodhury. (2018). India-Japan Relations: Economic Co-operation Enabled Strategic Partnership. International Studies. Vol.54 (1-4), 106-126. https://doi.org/10.1177/0020881718791404 DOI: https://doi.org/10.1177/0020881718791404
- Utkulu, U., Semen, D. (2004). ‘Revealed ‘Comparative Advantage and Competitiveness: Evidence for Turkey Vis-à -vis the EU/15. Paper presented in the European Trade Study Group 6th Annual Conference, ETSG.
- UN Comtrade Database accessible on http://comtrade.un.org/data/ (accessed on 30th April, 2017).
- UN ESCAP Database accessible on http://unescap.org/data/statistics/ (accessed on 6th March 2017).
- Widgren, M. (2005). ‘Revealed’ Comparative Advantage in the Internal Market. Working Paper 989. The Research Institute of the Finnish Economy.
- World Bank Database accessible on http://worldbank.org/data/ (accessed on 5th March 2017).
References
Atrey, Priti. (2014). India-Japan Relations: Economic, Strategic and Security Co-operation. UGC Centre for Southeast Asian & Pacific Studies. D&Dee Publications, Hyderabad.
Ambatkar, Sanjay. (2002). India and ASEAN in the 21st Century: Economic Linkages. Anmol Publications Pvt. Ltd, New Delhi.
Brown, A.J. (1949). Applied Economics: Aspects of World Economy in War and Peace. London: George Allen and Unwin.
Balassa, B. (1965). Trade Liberalization and ‘Revealed’ Comparative Advantage. The Manchester School of Economic and Social Studies 33, 92-133. https://doi.org/10.1111/j.1467-9957.1965.tb00050.x DOI: https://doi.org/10.1111/j.1467-9957.1965.tb00050.x
Business Line. (2018). How India and Japan are Enhancing their Strategic Relationship. 14th December.
Celine, Pejon. (2018). The Japan-India Economic Partnership: A Politically Driven Process. IFRI Centre for Asian Studies.
Geethanjali, Nataraj., Ashwani. (2014). India-Japan Economic Partnership Agreement: Gains and Future Prospects, ORF Occasional Paper.50.
Jayachandra, Reddy. (2014). India-Japan Relations: Economic, Strategic and Security Co-operation. UGC Centre for Southeast Asian & Pacific Studies. D&Dee Publications, Hyderabad.
Kojima, K. (1964). The Pattern of International Trade among Advanced Countries. Hitotsubashi Journal of Economics. Vol.16, 613-636.
Kumar, Nagesh. (2002). Liberalization and Japanese Foreign Direct Investments in India, Keshavan.K. V (eds), Building a Global Partnership: Fifty Years of Indo-Japanese Relations, Lancer Books, New Delhi.
Kondo, Masanori. (2012). Japan-India Economic Relationship: Trends and Prospects. RIETI Policy Discussion Paper Series, 12-P-016.
Leamer, E.L. (1984). Sources of International Comparative Advantage: Theory and Evidence, Cambridge Mass, MIT Press.
Lam, Peng. Er. (2013). Japan’s Relations with Southeast Asia: The Fukuda Doctrine and Beyond? London: Routledge. https://doi.org/10.4324/9780203101551 DOI: https://doi.org/10.4324/9780203101551
Leheny, David., Kay Warren, eds. (2010). Japanese Aid and the Construction of Global Development: Inescapable Solutions. London: Routledge. https://doi.org/10.4324/9780203869932 DOI: https://doi.org/10.4324/9780203869932
Lehman, Howard P. (2010). Japan and Africa: Globalization and Foreign Aid in the 21st Century. London: Routledge. https://doi.org/10.4324/9780203848876 DOI: https://doi.org/10.4324/9780203848876
Murthy, Narasimha. P. A. (1986). India and Japan: Dimension of their relations [Historical and Political]. New Delhi: ABV Publishing House.
Murthy, Narasimha P. A. (1993). India and Japan: Dimension of their relations [Economic and Cultural]. New Delhi: Lancer’s Books.
Madhavan, A. (2000). The Post-Cold War Equations In India–Japan: Towards a New Era, edited by Kamlendra Kanwar. New Delhi: UBSPD.
Maini, Tridivesh Singh. (2016). Japan’s Effort to Counter China’s Silk Road. www.theglobalist.com/japan-effort-to-counter-china-silk-road-india/.
Mathur, Arpita. (2013). India-Japan Relations: Drivers, Trends and Prospects, Monograph 23. Singapore: RSIS.
Mathew, Joseph., Subhasis, Bera. (2012). India-Japan and Investment Relations and Their Future Prospects. FCM (22), 225-242.
Naidu, G.V.C.(2004). Whither the Look Ease Policy: India & Southeast Asia. Strategic Analysis, 28:2, 331-346. https://doi.org/10.1080/09700160408450136 DOI: https://doi.org/10.1080/09700160408450136
Naoki, Ono. (2014). India-Japan Relations: Economic, Strategic and Security Co-operation. UGC Centre for Southeast Asian & Pacific Studies. D&Dee Publications, Hyderabad.
Observer Research Foundation. (2016). Challenges and Prospects of Japan’s Diplomacy – in the context of India-Japan Relationship. www.orf.org.
Purnendra, Jain. (2017). Twin Peaks: Japan’s Economic Aid to India in the 1950s and 2010s, JICA Research Institute. No. 139.
Rajamohan. P. G., Rahut, Dil Bahadur., Jacob, T. Jabin. (2008). Changing Paradigm of India-Japan Relations: Opportunities and Challenges. Indian Council for Research of International Economic Relations. Working Paper. No. 212.
Raghuramapatruni, Radha. (2012). India’s Trade with the ASEAN Realities & Prospects. Abhijeet Publications, New Delhi.
Rani, D. Mullen., Kashyap, Arora. (2017). India-Japan Brief. Centre for Policy Research. www.cprindia.org.
Razeen, Sally., Rahul, Sen. (2012). Whither Trade Policies in Southeast Asia? The Wider Asian and Global context. ASEAN Economic Bulletin. 22(1), 92-115. https://doi.org/10.1355/AE22-1H DOI: https://doi.org/10.1355/AE22-1H
Srabani Roy, Chodhury. (2018). India-Japan Relations: Economic Co-operation Enabled Strategic Partnership. International Studies. Vol.54 (1-4), 106-126. https://doi.org/10.1177/0020881718791404 DOI: https://doi.org/10.1177/0020881718791404
Utkulu, U., Semen, D. (2004). ‘Revealed ‘Comparative Advantage and Competitiveness: Evidence for Turkey Vis-à -vis the EU/15. Paper presented in the European Trade Study Group 6th Annual Conference, ETSG.
UN Comtrade Database accessible on http://comtrade.un.org/data/ (accessed on 30th April, 2017).
UN ESCAP Database accessible on http://unescap.org/data/statistics/ (accessed on 6th March 2017).
Widgren, M. (2005). ‘Revealed’ Comparative Advantage in the Internal Market. Working Paper 989. The Research Institute of the Finnish Economy.
World Bank Database accessible on http://worldbank.org/data/ (accessed on 5th March 2017).