Ananya Dixit
Department of Economics
National PG College(Autonomous)

Lucknow, Uttar Pradesh-India

Abstract- There has been an unprecedented growth in international merchandise trade across economies with India being not an exception. This growth has been instrumental in shaping the economy of India. There are vast array of economic and non-economic factors affecting the international merchandise trade and the study aims to empirically estimate the key determinants of international merchandise trade to understands its dynamics and be useful in formulation of suitable trade strategies. Extensive literature review enables identification of factors on which empirical estimation has been done using the ARDL Bounds test approach to cointegration for a period of 1995-2019. The approach was helpful to estimate the long-term and short-term relationship between merchandise trade and factors undertaken in the study. Using world bank indicators database, study found that global income, services trade, world’s population and Real effective exchange rate have positive and significant impact on merchandise trade of India. Based on the results, suitable practical and policy implications of the study have been suggested.

Keywords- ARDL Bound test approach to cointegration, economic determinants, global income, merchandise trade, real effective exchange rate.

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