Dynamics of comparative advantage in India’s agricultural exports

Abstract

This paper analyses the dynamics of comparative advantage in agricultural exports of India over the period 2001 to 2019. We use the revealed comparative advantage index, and its variant, the revealed symmetric comparative advantage index, to analyze the pattern of export specialization and the Markov transition matrix to examine the product mobility of comparative advantage. The study has shown that the extent of agricultural trade openness has remained constant over time and that there has been little change in the composition of agricultural exports. Analysis of the mobility of comparative advantage reveals little mobility of products from the lowest to the highest decile. There is a 65.8 per cent probability that a product will stay in the first decile even after nearly two decades. A high degree of persistence of export specialization implies a higher probability of starting and ending-up in the highest decile. The study suggests that India should aim at diversification of the agricultural export basket through a product-specific focus based on export demand and the exploration of new global markets.