Make in India An Opportunity for sustainable Entrepreneurship Development Trade and Environment

This paper evaluates the environmental impacts of economic growth and trade liberalization in India. The empirical strategy in this paper is to estimate the scale, technique and trade-induced composition effects of trade liberalization on pollution. The liberal trade policies that involved reduction in trade barriers and facilitated inflows of foreign direct investment, capital and technologies restructured the Indian manufactures industries, apart from the difference in factors endowments the comparative advantage nowadays is seen in terms of environment regulatory gaps between the trading partners. This rasies the concern whether trade induced production structure if Indian manufacturing industries is generating environmental externality. This study is endeavored to explore the relationship between trade liberalization economic growth and environmental externalities by taking the case of Indian manufacturing industries. Major economic reforms undertaken since 1991 have brought the Indian economy into a new phase of development directed toward becoming globally competitive through the opening of trade, foreign investment, and technology inflows. The private sector is expected to play a lead role, with a corresponding reduction in the role played by the public sector. The results establish that the impact of growth and trade liberalization on environmental pollution is not unique across the pollutants. It rather depends upon the specific indicator that is examined. Finally, we conclude that trade promotion in the presence of a dynamic pollution regulatory framework can yield sustainable trade.