ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Intra-industry Trade of India

The structure of India’s intra-industry trade, more specifically, decomposition of IIT into horizontal and vertical trade is analysed using support vector machines as the existing approaches to disentangle IIT into horizontal and vertical trade suffer from some limitations. For the period 1978–2013, at the SITC 5-digit disaggregated level, more of India’s IIT is of the horizontal type when compared to the Greenaway-Hine-Milner approach. This has important policy implications as far as trade-induced adjustments costs are considered. However, over time the share of HIIT in total IIT is declining, whereas the share of VIIT is rising which may indicate technological improvement.

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