Munich Personal RePEc Archive

India's trade linkage with South Africa: Prospects and future potential

Wani, Nassir Ul Haq and Rehman, Dr. Afzal Ur and Kukreja, Mukta (2016): India's trade linkage with South Africa: Prospects and future potential.

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Abstract

India and South Africa are the two important emerging economies of the world with strong history of understanding. To shed light on the possibilities and limits of important coalitions among budding countries, this article focuses on Indo-South Africa trade relations. The article evaluates the structure of comparative advantage for India and South Africa and the modification in the economic scenario over a 14-year period from 2001 to 2014. The article attempted to evaluate India– South Africa trade using revealed comparative advantage (RCA) and revealed import dependence (RID) analysis in exports and imports in different type of goods categorized on the basis of their fabrication. The analysis shows broad similarities in the structure of comparative advantage for India and South Africa. Both India and South Africa enjoy comparative advantage for labour and resource intensive sectors in the global market. India enjoys comparative advantage in the exports of labour-intensive items such as textiles and scale-intensive items while South Africa enjoys advantage in manufacturing goods. The trade growth trajectory expansion between the economies has lead to sustained growth in their merchandise trade flow.

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