Bolstering critical minerals trade between India and other MSP countries: A gravity model evaluation

Abstract

This study aims to evaluate the opportunities for a sustainable environment, an equitable economy, and a just society through the international trade of critical minerals. By employing a gravity model, it intricately analyzes the trade dynamics between India and 13 other members of the Mineral Securities Partnership (MSP). The study indicates a landscape rich with potential for enhancing environmental protection; however, this is somewhat overshadowed by a decrease in the overall impacts on the economic and social dimensions of sustainable trade practices. The apparent lack of synergy among the various outcomes that arise from increased trade underscores a pressing need for policymakers to create pathways where environmental, economic, and social opportunities can harmoniously reinforce one another, amplifying the benefits of critical mineral trade. Moreover, the empirical findings highlight that income heterogeneity positively influences sustainable trade practices across environmental, economic, and societal fronts, thereby affirming the Heckscher-Ohlin hypothesis. Crucially, the study identifies the variability in trade uncertainty between partners as a powerful catalyst for trade and a driver of innovation within MSP countries. The discussion further delves into the effects of research and innovation, currency exchange, and geographical distance on sustainable trade, especially concerning QUAD and non-QUAD nations. This emphasizes the imperative for customized strategies that elevate global sustainable trade, considering the unique economic structures and regulatory landscapes at play.