SPS Regulations and Competitiveness

Abstract

This article investigates India's export performance of spices (whole pepper and capsicum) in the markets of the Organization for Economic Cooperation and Development (OECD) and South and Southeast Asia, which constitute a substantial market for Indian spices. A Constant Market Share model is used to decompose the growth in exports of spices into size of the market effect, market composition effect and competitiveness effect. The analysis is performed for the exports during the nineties, the period India had to resort to increased challenges of food safety. The study confirms that there has not been substantial trade effect for Indian spices due to quality issues, such as sanitary and phytosanitary regulations. This article argues that increase in exports to neighbouring regions is explained more by the increased demand and supply and not by the stringent quality requirements of traditional importing countries.

Keywords

JEL: F14 JEL: F18 JEL: Q17 JEL: Q18 Competitiveness Sanitary Regulations Spice Trade Constant Market Share Model

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