Relationship between trade liberalization and economic growth – Indian prospective

This paper examines impact of trade liberalization on economic growth of India. The research problem is expressed as “To what extent does trade liberalization or openness of the economy influence on economic growth of India?” The primary objective of the study is to investigate the causal relationships between the trade liberalization and economic growth of India. The study is mainly based on secondary data. In identifying the impacts of trade liberalization on growth and trade balance, data were collected on a specific time interval before and after the trade liberalization. The time period selected is from 1970 to 2012. To identify the impacts of trade liberalization, total time period is divided into two sub periods of before trade liberalization i.e. (1970 to 1991) and after trade liberalization i.e. (1991 to 2012). Granger causality test was used for determine the casual relationship between trade liberalization and economic growth. This paper found no relationship between trade liberalization and economic growth.