Abstract
This paper examines India’s welfare gain after becoming a WTO member in comparison to pre-WTO scenario. The mechanism closely follows Lai, Riezman & Wang (2016) that took up the Chinese case. In defining the theoretical welfare estimates, we employ a simple and modified version of Arkolakis, Costinot, and Rodriguez-Clare (2012) welfare definition and gains from trade. Data on trade elasticity are taken from Caliendo and Parro (2015). We analyze and evaluate welfare comparison by decomposing India’s industries into importing and exporting sectors according to their respective trade intensities based on the benchmark year, 1995 (when India joined WTO as a founder member). We have found that major industries in India have registered significant amount of welfare gain in the post-WTO periods compared to the pre-WTO scenario and its import sectors have recorded larger welfare gains relative to the export sectors.
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