Examining the impact of India–USA free trade agreement on agriculture sector: an ex-ante partial equilibrium analysis

Abstract

Purpose

The purpose of the paper is to explore the economic repercussions of potential India–USA free trade agreement (FTA) on the trade of agricultural commodities at HS 2-digit level.

Design/methodology/approach

The analysis is undertaken by assuming tariff reduction in a phased manner using the World Integrated Trade Solutions (WITS)-SMART partial equilibrium model to identify the trade creation and trade diversion effects.

Findings

Overall results show that both the trading partners gain from the proposed FTA. Trade creation dominates over trade diversion in India's analysis.

Practical implications

An FTA between India and the USA could be an essential step toward more liberal trade regimes and provide enormous economic benefits to both countries. Government of both the countries should support deeper integration. This will create more job opportunities and generate prosperity in both economies.

Originality/value

There are numerous studies conducted on evaluating the impact of FTAs ratified between countries. But there are limited studies which evaluate the impact of the proposed India–USA FTA on the economies of both trading partners specifically on the agriculture sector.

Citation

Jain, N. and Kumar, S. (2022), "Examining the impact of India–USA free trade agreement on agriculture sector: an ex-ante partial equilibrium analysis", Journal of Economic and Administrative Sciences, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JEAS-12-2021-0272