Causal Relationship between Exports, Imports, and GDP during COVID-19 Pandemic: Evidence from an Emerging Economy

Abstract

The unexpected COVID-19 global pandemic has posed new challenges for global trade. Consequently, during the COVID-19 pandemic, the entire world has stagnated its economic growth; this is reflected in India's growth. The growth is contributed by effective foreign trade and its policies. The COVID-19 pandemic has opened up a new avenue to understand the contribution of trade to economic growth. The current study is aimed to understand the performance of Indian foreign trade in the light of select agricultural and non – agricultural products in COVID-19 pandemic. The study results confirm that exports and imports have drastically declined due to India's global pandemic and economic lockdown. Somehow it is recovered gradually but not as it was before the pandemic. The study also found that bidirectional causality has existed between India's GDP and imports during the COVID-19 pandemic.