Abstract
There is a wide cleft between the exports from India to the world and exports from China to the world. The share of Chinese and Indian exports is 11.13% and 1.60% (WTO, 2012) respectively of the overall worlds’ export. This prompts us to find out the impact of selected Indian and Chinese macro economical variables on the exports from India and China respectively. This research is divided at three levels – At first level macro economic variables which put an impact on exports from any country are selected. The selected variables are Gross Domestic Product (GDP), FDI inflows, Exchange Rate, Per Capita Real Income and Inflation. At second level an econometric model has been designed to predict the impact of selected macro economic variables of Indian economy on the export of China and the impact of selected macroeconomic variable of Chinese economy on the export of India. The current research would enable us to predict the export of both China and India and would help in formulating export strategies of the country. At third level polices are suggested on the basis of the model to improve the exports from India. Principal component regression analysis is used to prepare economic model from the selected independent macro economic variables. Numbers of selected variables are not exhaustive leaving an opportunity for others to further explore them.
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