Journal Press India^®

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Purpose: This paper aims at examining short run and long run relationship among GDP, export and import in India for the study period 1991-2018 using annual data, various econometric tools are employed to analyse whether there is association among the variables in the time series data or not.

Design/Methodology/Approach: Unit root test has been applied to test the stationary of the data in the time series which find variables stationary at first level. Johansen’s Co-integration test has been used to determine the long run common path among the variables which infers one Co-integration equation. AIC and SC are used for the selection of lag length criteria, while VECM test infers long run association among the variables but statistically insignificant.

Findings: It is suggested to the policy makers and government of India to promote economic activities and pursue diversification in commodities and market along with trade integration for the expansion of export and continue importing necessary raw material for value addition and needed technology to expand the capacity to improve productivity. Granger causality exhibits short-run unidirectional causality from GDP to export while bidirectional causality exists between import and GDP and there exists no directional causality between export and import in India.

Research Limitations: The data have limitations as it is only for the period 1991-2018. Data is restricted only to secondary sources.

Managerial Implications: This research would provide an impetus to the the policy makers and government of India to promote economic activities in the country.

Originality/Value: There has not much studies in this area

Keywords

Export Led Growth, Import Led Growth, Co-integration, VECM, Granger Causality, Economic growth in India.

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