A Time Series Analysis of Bilateral Trade of India and Saudi Arabia

Abstract

This paper delves into the bilateral trade dynamics between India and Saudi Arabia over the period from 2001 to 2018, aiming to dissect the trends, features, and challenges that have shaped their trade relationship and yielded mutual benefits for both nations. To accomplish these objectives, the study employs methodologies such as the trade intensity index and revealed comparative advantage, examining both aggregate and disaggregate levels of trade. The analysis reveals significant disparities in the export structures of India and Saudi Arabia, indicating a lack of direct competition between the two nations in various areas of merchandise trade. This divergence in specialization suggests that bilateral trade liberalization has facilitated complementary rather than competitive trade patterns, laying the groundwork for enhanced economic growth potential for both countries. The findings underscore a noticeable acceleration in bilateral trade between India and Saudi Arabia, signifying a positive trajectory in their economic trade relations. This suggests that the deepening of trade ties has fostered mutual economic benefits and strengthened the economic interdependence between the two nations. This study highlights the importance of bilateral trade as a driver of economic growth and cooperation between India and Saudi Arabia. By leveraging their respective comparative advantages and fostering complementary trade patterns, both countries stand to gain from enhanced trade relations, leading to broader economic development and prosperity for their respective populations.