New Zealand–India Trade Relations and Growth Potential: An Empirical Analysis

Abstract

This study examines the bilateral trade relations between New Zealand and India from 1990 to 2014. Using export and import intensity indices and revealed comparative advantage (RCA) indices, it identifies sectors where there is static and dynamic comparative advantage and complementarities. It also examines the extent and movement of intra-industry trade (IIT), using IIT indices, and analyses these indices to consider how trade patterns and relations have changed between 1990 and 2014. Findings show that trade between New Zealand and India has increased in recent years. The intensity of trade has strengthened, and there has been growth in IIT for a number of industries and product groups. Results also suggest high degree of static and dynamic comparative advantage in a number of product groups. The findings of this study should be relevant to future bilateral trade, economic relations, technology transfer and cultural exchange between New Zealand and India.