Global Financial Crisis: Implications for Trade and Industrial Restructuring in India

Abstract: This paper investigates the impact of global crisis shocks on India’s trade and industry. The estimated results show that changes in trade composition are positively associated with changes in manufacturing composition in India, controlling for other variables. While analysing its dynamic effects, compositional change in industry has responded significantly to the export to USA, Japan and EU in the crisis period. However, there is no strong indication to conclude that Indian industry has been severely affected by the fall in demand in crisis-affected advanced economies such as US, EU and Japan, holding other things constant. Key words: Global crisis, trade, industrial composition, trade openness, India JEL codes: F02, F13, F17, F42, F47, L6, L7