Forest Stakeholders, Policies and Trade in India's Forest Sector

Abstract

The thesis examines a panel of trade flows during 2009-2013, exploring the influence of regulatory quality on the pattern of forest products imports by India from 143 partner countries. The study applies a pooled regression model followed by Generalized Least Squared (GLS) technique and a more robust Feasible Generalized Least Squared (FGLS) method of estimation with regulatory quality, distance between the partner country and India, total forest area of partner country, GDP and population indicators to assess the impact of partner country’s regulatory quality and other trade-related factors on imports of forest products by India. The results support the notion that imports of forest products depend on regulatory quality, the distance between the trading countries, forest cover, the size of the economy and other factors considered in the model. The study also considers the impact of regional variability on forest products import by India. Quantitatively, the results suggest that a 1 percent improvement in regulatory quality of the partner country would yield a 6.10 percent increase in imports of forest products by India. A 1 percent increase in distance between India and the trading country yields a 0.60 percent decrease in total import volume, whereas a 1 percent increase in forest area of partner country and a 1 percent increase in GDP of partner country yields an increase in forest products imports to India by 0.24 percent and 0.75 percent, respectively. Thus, it confirms that while improvement in regulatory quality of partner countries contribute to improved imports, improvements in the GDP of partner country and increase in the total forest area are equally important in facilitating the growth of forest products imports by India. This improvement implies policy emphasis on the governance, economy and environment of the trading countries and, are important to support the furtherance of the volume of trade flows across countries.