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Trends in the Terms of Trade and Revealed Comparative Advantage: An Indian Experience
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This paper attempts to examine linear and exponential trend in India's terms of trade at aggregate level as well at disaggregate level. The exponential trend in terms of trade has been examined through TSP model, as well as through DSP model. Its observed that India did not experience deterioration in its net barter terms of trade during the period under considerotion. The terms of trade is observed to be trendless for all commodity groups except beverages and tobacco and animal and vegetable oils and fats. The index of revealed comparative advantage has been estimated far each section of RITC group. The index of revealed camporative advantage has improved in case of chemicals and miscellaneous manufactured products, whereas, deterioration is observed for manufactured good, chiefly clossified by materials. The negative impact of revealed comparative advantage is observed on terms of trade of a country.
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