IDEAS home Printed from https://ideas.repec.org/a/sae/fortra/v61y2026i2p234-255.html

Removing Trade Barriers Between China and India: A Counterfactual Analysis on Export Growth and Welfare

Author

Listed:
  • Umar Nisar Kathjoo
  • Asif Fazili

Abstract

The two Asian giants, China and India, share a long history of political acrimony and simmering border disputes. This often disrupts their bilateral economic relationship along with the overall dynamics of the regional balance of power and the global multi-polarisation order. Under such a scenario, this study aims to measure the impact of a hypothetical removal of all trade barriers between China and India on the overall exports and welfare of 73 sample countries while preserving the geographical trade costs. Employing the structural gravity model under a general equilibrium setting, the counterfactual scenario reveals that India, followed by China, is the main beneficiary of full-scale integration in terms of trade growth and welfare. Indian consumers gain while producers tend to lose through a decrease in prices. Chinese welfare gains are shared among its producers and consumers with light asymmetry. Next, we simulate a unilateral removal of all trade barriers while preserving the effects of geography for exports from China to India. The results reveal that asymmetric trade liberalisation leads to smaller gains for both countries at the expense of certain groups and the aggregate national welfare. JEL Codes : D58, F02, F17, O57

Suggested Citation

  • Umar Nisar Kathjoo & Asif Fazili, 2026. "Removing Trade Barriers Between China and India: A Counterfactual Analysis on Export Growth and Welfare," Foreign Trade Review, , vol. 61(2), pages 234-255, May.
    • Handle: RePEc:sae:fortra:v:61:y:2026:i:2:p:234-255
    DOI: 10.1177/00157325231215548

    Download full text from publisher

    More about this item

    Keywords

    ; ; ; ; ;

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:fortra:v:61:y:2026:i:2:p:234-255. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.