Direction of Trade of Major Indian Agricultural Commodities Among SAARC Countries

The South Asian Association for Regional Cooperation is constituted by Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Agriculture sector is still backbone of economy of all SAARC members. India exports different agricultural commodities to SAARC member countries under cereal, pulses, fruits and vegetables, processed food products, alcoholic and non-alcoholic beverages, planting materials, livestock products etc. major exportable agricultural commodities such as wheat, rice, mango and onion have been purposively selected for further analysis as these commodities are commonly exported from India to all other SAARC member countries. Markov chain analysis was used to analyze the direction of trade. Maldives is stable market for rice with high retention probability of 41.54 per cent among the SAARC countries for reference period. Bangladesh is most stable market for all four commodities such as rice, wheat, mango and onion as reflected by retention probabilities of 22.86, 45.40, 39.29 and 24.00 per cent, respectively among the SAARC member countries. It was observed that India was in a competitive position in rice, mango and onion with the NPCs values of 0.98, 0.975 and 0.893, respectively for the period of 2008-09.