Trade liberalisation, intersectoral linkages and forex inflow: an empirical investigation of India

Using input output framework, this paper investigates the existing intersectoral linkages and their implications for the export sector of the Indian economy in the year 2007–08. For this purpose, the concept of world and domestic linkages are introduced and the analysis is extended to both current (flow) and Capital account. On the other hand, sectoral net foreign exchange inflow rates are estimated. The paper comes to the conclusion that, though India stands out for the size and dynamism of service sector, the world and domestic linkages for most of the service sectors are relatively weak.