Indo – us merchandise trade: Export prospects

The economies of world are under stress and the trade between the largest economy, the USA, and one of the fastest growing economies, India, is of vital importance in relieving this stress in their respective economies. The present paper tries to identify high potential export commodities on the basis of Revealed Comparative Advantage (RCA) analysis from 2006 to 2010. Paper uses the RCA of India in exports and compares it with RCA of USA in imports taking HS Code as the basic unit of classification. Instead of analyzing the RCA at particular time, this paper does so for a period of time (2006-10) and it also goes a step ahead to compare the rank of these commodities in exports to draw its implications on foreign trade policy. The Data as per the HS classification is used to compute the index of RCA and a time-series study provides information and opportunities in sectors, which have displayed a continuous trend in comparative advantage.