Keywords
Kinked Growth
Handloom Exports
Tariff
Trade Diversification
New Trade Policy
How to Cite
Abstract
This study investigates the presence of a structural break in India’s handloom export trajectory with special reference to the trade relationship with the United States and some of the European countries. Considering recent changes in US tariff policies, disruptions caused by the Covid-19 pandemic, associated transformations in global supply chains, and changes in consumer behavior, this study uses the Chow test and Boyce’s kinked exponential growth model to evaluate the handloom export dynamics of India. Using the secondary data, the study identifies a statistically significant structural break during 2019, coinciding with the pandemic and exacerbated by transformations in trade relations with the US and some of the mature Western markets. The kinked growth model identifies the stagnant growth pattern in the pre-covid period and a sharp decline after the break. The study brings out the vulnerability in our traditional trade relations with some of the Western markets and calls for developing new strategic trade relationships focusing on diversification. The study also indicates the importance of institutional support and policy realignment to protect the vulnerable but socioeconomically and culturally important handloom sector.
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