An Analysis of Growth and Competitiveness of India’s Climate Smart Goods Exports

Climate Smart Goods have become a vital part of foreign trade for the sustainable development of any economy, with an increasing emphasis on mitigating climate issues. Climate Smart goods contribute not only towards inclusive development, but they also facilitate the environment-conscious markets in the world due to alarming climate issues such as greenhouse gas emissions. The study attempts to find climate-friendly or environmentally aware commodities to contribute towards the environmentally sound trade, especially in the context of India. The study used the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) list of 64 climate smart goods for the analysis purpose. Secondary data from the UN Comtrade is collected for the years 1988 to 2019. The study measured the compound annual growth rate and a revealed comparative advantage (RCA) for the exports of climate smart goods of India for the considered study period. The study observed that India’s total CSGs exports grew at a higher rate compared to India’s total exports for the whole study period (i.e., 1988 to 2019), and for the sub-periods, i.e., 1991 to 2000, 2001 to 2010, and 2011 to 2019. The study found that sixteen climate smart goods (belonging to the chapters 56, 70, 73, 84, 85, and 90) recorded a growth rate of more than 50 percent for the whole study period, i.e., 1988 to 2019. During 2011 to 2019, the HS code 841181 (gas turbines of a power not exceeding 5,000 kW) recorded a growth rate of more than 50 percent (i.e., 65.3 percent). Among 64 CSGs, the maximum number of sub-categories of CSGs observed positive but less than 50 percent export growth for the recent sub-period, i.e., 2011 to 2019. As per the average values, India confirmed export competitiveness for the considered study periods, except for the year 1995. For the initial year, i.e., 1988, India registered a revealed comparative advantage (RCA) of more than unity for twenty-two CSGs, but it revealed a comparative advantage of more than unity for thirty-one CSGs in the last year of the study period, i.e., 2019. It is evident from the results that the maximum sub-categories of India’s CSGs with export competitiveness belong to the Chapters 84 and 85 of the Harmonized System (HS) of classification.