Impact of India’s Trade Agreement with Japan on its FDI Inflows: A Brief Analysis
Vrinda Chadha & Kanupriya
What the paper says
The economic reforms of 1991 transformed India’s economy from a relatively closed to an open, liberal and marketorientedsystem. These reforms not only led to reduced trade barriers but also helped in augmenting foreign investments(notably, Foreign Direct Investment (FDI)) in the country. There are several benefits of FDI in terms of augmenting anation’s production capacities, technology transfers and improvements in human and physical capital. Keeping thesein view, the country has sought to boost its FDI inflows through trade agreements such as India-Japan ComprehensiveEconomic Partnership Agreement (CEPA). Hence, this study aims at furnishing strong empirical evidence to understandwhether India- Japan CEPA has facilitated greater FDI inflows to India. The same is studied with the help of VECM modelfor the time period 2000-23. The study contends that this trade agreement has had a beneficial and substantial impact onIndia’s FDI influx. In the future, India should ensure that upcoming CEPA type agreements are supplemented by supportingpolicies designed to foster sectoral competitiveness, regulatory efficiency and investment sustainability.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.