Causality between Exports and Imports of Agricultural Sector in the Case of India: Granger Causality Analysis

This paper is an attempt to investigate the causal relationships among agricultural sector export and agriculture sector import in India by using time series data for the period between 1990 and 2011. This study checked that whether there is uni-directional or bidirectional causality between agricultural sector export and agriculture sector import in India. In order to investigate long-term relationship and causality among these variables, we use Johansen cointegration and Ganger causality test with time series data covering the period of 1990–2011. The finding shows that there is significant relationship between total national exports and total agriculture exports, total national import and agriculture sector imports in India. The Johansen cointegration result shows that the variables are co-integrated, so there is the long run relationship between agricultural sector export and agriculture sector import in India. In this paper, the results reveal that there is Bidirectional causality between agriculture exports and agriculture imports, Total national imports and total national exports in India.