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The Spillover Effect of US‐China Tension on India's Medium‐High‐Tech Manufacturing Exports

Exploring the Role of Export Market Diversification

Bibliographic Data

ID12705395
AuthorsHimanshu Sekhar Panda (0009-0009-5888-0382, Department of Humanities and Social Sciences Indian Institute of Technology Kharagpur Kharagpur West Bengal India, corresponding author), Mantu Kumar Mahalik (0000-0002-4057-8734, Department of Humanities and Social Sciences Indian Institute of Technology Kharagpur Kharagpur West Bengal India)
Year2025
Volume26
Issue1
Publication date2025-12-01
Open AccessYes
TypeARTICLE
VenueJournal of Public Affairs (JOURNAL)
Journal identifiersISSN: 1472-3891 • E-ISSN: 1479-1854
PublisherWiley (PUBLISHER • GB)
DOI10.1002/pa.70096
OpenAlexW4416858578
LanguageEN
References cited93

Rising US‐China tensions can significantly reshape the worldwide trade dynamics by disrupting established supply chains. Addressing this, this study explores the impact of US‐China tension on India's medium‐high‐tech manufacturing exports by obtaining time series data from India spanning 1997 to 2022. This study also examines the behavior of export market diversification on medium‐high‐tech manufacturing exports, in the presence of US‐China tension. To measure these relationships, the Dynamic Autoregressive Distributed Lag (DARDL) method is employed. The findings reveal that the US‐China tension exerts a positive impact on India's MHM exports, while export market diversification deteriorates it. Interestingly, this study discovers that export market diversification exerts a beneficial impact on India's medium‐high‐tech manufacturing exports in presence of the US‐China tension. Additionally, this study shows a beneficial role of domestic bank credit, economic growth, total export demand, government effectiveness, and currency depreciation on India's medium‐high‐tech manufacturing exports. These findings are consistent with the results from Fully Modified Ordinary Least Squares (FMOLS). The marginal plot and heatmap analysis provide robustness of the interaction effect. Results from the CUSUM and the CUSUM Square confirm the estimated model stability. These findings offer policy recommendations for Indian policymakers to maximize the MHM exports

CUSUM · Depreciation (economics · Distributed lag · Diversification (marketing strategy · Exchange rate · Export performance · Ordinary least squares · Spillover effect · Economic and Technological Innovation · Global trade and economics · International Business and FDI

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