Seminar: "Estimation of the Key Economic Determinants of International Trade in Services: Evidence from India" by Dr. Mini Thomas
India’s international trade in services benefited immensely from the change in policy stance from import substitution to export promotion in the post-reform period. Services trade received a further boost with technological advances and India becoming signatory to the General Agreement on Trade in Services (GATS) of WTO in 1995. Business services, financial services and communication services have emerged as the major components in India’s services trade basket during this time period. This paper aims to estimate the income and price elasticities of India’s services trade during the post-WTO period, using the autoregressive distributed lag (ARDL) approach to cointegration. This study found that the long-run income elasticity of services export is quite high and statistically significant, whenGDP of the OECD countries is taken as proxy for GDP of importing countries. However, the price elasticity of services export is found to be statistically insignificant. In case of services import, both the income and price elasticities of demand are found to be statistically significant, and services import is found to be more responsive to income than relative prices. The empirical validity of Marshall Lerner Condition and the policy implications of the findings for India’s services-led growth strategy are also explored.
Dr. Mini Thomas P is currently Assistant Professor in Department of Economics & Finance at BITS Pilani Hyderabad, India. She teaches International Economics, Public Finance and Principles of Economics at BITS. She completed her PhD in Economics in 2016 from the Institute for Social and Economic Change (ISEC), Bangalore. She holds an MA in Economics from Universityof Hyderabad and is recipient of UGC-JRF. She has also gained research experience from Reserve Bank of India, Centre for Development Studies and Harvard University. The major focus of her doctoral work was on studying the impact of international trade in serviceson India’s economic growth and external stabilisation. Her primaryresearch interests are in international trade and service economy.