An Analysis of India-SAARC Trade in Pharmaceuticals with Special Emphasis on the COVID-19 Pandemic

Abstract

This study attempts to explore the prospects of India’s pharmaceutical trading relationship with other South Asian nations in the light of some select trade indexes. To this end, the study makes use of secondary data retrieved from the UN Comtrade database for a period of 15 years from 2007 to 2021. An analysis of the trade intensity index brings out that India has an intense pharmaceutical trade relationship with Nepal and Sri Lanka, suggesting the possibility of future integration. However, India’s pharmaceutical trade is found to be lesser than expected with respect to Bangladesh and Pakistan, underlining that there is a significant gap to be filled and enormous potential to be realized. From the computation of revealed comparative advantage, it is found that, with the exception of India, no other South Asian nations has a comparative advantage in pharmaceuticals. Further, the analysis of trade complementarity index reveals a fair degree of complementarity among SAARC nations in trading pharmaceuticals, necessitating expanded trade to capitalize on this complementarity. This study also sheds light on the role of India’s pharmaceutical industry in ensuring critical healthcare supplies in South Asia during the COVID-19 pandemic.