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

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India and China

Trading with the World and Each Other

Analysing the competitive and complementary position of India and China in the world economy and evaluating bilateral trade in commodities between them, this paper shows different paths of specialisation and an intensification of bilateral trade. Indian comparative advantages are still concentrated in the traditional sector and in some manufacturing sectors, while China has specialised in mass exports of cheap goods, becoming competitive in exports of electronic goods. India and China complement each other in many areas, as revealed by a growing inter-industry trade, and there is ample room for them to further increase bilateral trade and exchange valuable experience and learning with each other.

We sincerely thank Alberto Botta and Riccardo Puglisi for their helpful comments and technical assistance.

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