India's Bilateral Trade with African LDCs : An Empirical Analysis

The Indian economy has widened its economic partnership with African LDCs during the lastdecade especially after the implementation of the Duty Free Tariff Preference (DFTP) scheme byGovernment of India in 2008. The present study gives an overview on trade relations betweenIndia and African LDCs in two separate analyses. First, it analyzes the trend and pattern in thetrade relations between the countries from the year 2002-2017. It is found that the trade volumeof both the reporter and partner countries has been increased over the years up to 2014 andthereafter it has shown a downfall. Secondly, this study uses Trade Intensity Index (TII) andRevealed Comparative Advantage (RCA) index to identify the complementary and competingsectors of trade between India and African LDCs. Results from the TII shows that trade betweenIndia and African LDCs are more intense as compared to rest of the world. In addition, the resultof the Bilateral Revealed Comparative Advantage (BRCA) shows that India possesses a highcomparative advantage in a wide variety of products including, machinery, manufacturing andhighly demanded primary products, whereas African LDCs possess comparative advantage in alimited range of products including some low costs primary and industrial products. Overall, thetrade relationship between the countries is intensive and stable. However, like India has beenenjoying bilateral comparative advantage extensively, African LDCs too need to seek moreproducts including manufacturing and machinery in order to expand its export basket