An Aggregate Import Demand Function for India: A Cointegration Analysis

This paper investigates the behaviour of Indian aggregate imports during the period 1971-1995. In our empirical analysis of the aggregate import demand function for India, cointegration and error correction modelling approaches have been used. In the aggregate import demand function for India, import volume is found to be cointegrated with relative import price and real GDP. Our econometric estimates of the import-demand function for India suggest that import-demand is largely explained by real GDP, and is generally less sensitive to import price changes. Import liberalisation is found to have had little impact on import demand. * While writing the paper, Nasiruddin Ahmed was a PhD student in The School of Economics and Political Science University of Sydney Disclaimer Notice : The responsibility for the opinions expressed in these working papers rests solely with the author(s). The School of Economics and Political Science gives no warranty and accepts no responsibility for the accuracy or the completeness of the material.