This article compares China and India, the two biggest emerging market economies in the world, with respect to their trade in pollution-intensive industries and tries to discuss the policy environment supporting such growth. The analysis is carried out for 13 categories of pollution-intensive products based on the Standard International Trade Classification Revision 3 classification. Our analysis reveals significant growth in trade in these products in both countries, with a higher intra-industry trade and a significant correlation with environmental stringency. Between the two, India seems to be enjoying a better comparative advantage. Findings suggest a need for adopting cleaner production processes and a cautious approach towards industrial promotion.
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