COMPARATIVE ANALYSIS OF EXPORT LED AND IMPORT LED GROWTH MODELS-A CASE STUDY OF CHINA AND INDIA

Abstract

This study compares how export-driven and import-driven growth strategies have influenced economic development in China and India. Using data from 1971 to 2021 and ARDL Bound cointegration analysis were used. The objective is to understand which growth strategy is more effective and what it means for overall development. The analysis reveals distinct patterns of export-led and import-led growth in China and India. China's export-led growth model is characterized by its strategic focus on becoming the "world's factory," using abundant labour supply, low production costs, and proactive trade policies to capture a significant share of international trade. In contrast, India's import-led growth model is driven by its reliance on imports to meet domestic demand for crucial commodities, raw materials, and capital goods, as well as its strategic approach to economic liberalization and globalization. The study also explores the implications of export-led and import-led growth strategies on economic development, highlighting the importance of stability, resilience, and innovation in driving sustainable growth. While both models have their strengths and challenges, policymakers need to modify interventions to use their respective advantages and address constraints effectively. Overall, the comparative analysis provides valuable insights into the trade-growth dynamics of China and India, offering policymakers and researchers a deeper understanding of the factors shaping their economic trajectories and the implications for global trade and development. This study contributes to the existing literature by offering a comprehensive analysis of export-led and import-led growth models in the context of China and India. However, further research could explore additional variables and employ more robust methodologies to enhance our understanding of the trade-growth nexus and its implications for economic development.