Economic Asymmetry and Trade Openness: An Intra-Industry Trade Analysis of India–Myanmar Plastic Products using the Grubel-Lloyd Index

This study examines the determinants of intra-industry trade (IIT) in plastic goods between India and Myanmar over the time period of 2013 to 2023. It focuses on key product groups under HS ( Harmonized Commodity Description and Coding System) Chap. 39, including packaging and plastic articles (HS 3923 and 3926). Using the Grubel-Lloyd index to measure the intensity of trade symmetry, both pooled OLS and logistic regression with interaction models are employed to investigate how economic asymmetry (GDP gap), trade openness, and external shocks, particularly the COVID-19 pandemic, influence the structure of Indo-Myanmar bilateral trade. The pooled regression model finds that both trade openness and GDP gap play important roles, with a significant interaction term indicating that greater trade openness facilitates intra-industry trade even when the two economies are structurally different. The logistic regression with interaction further reinforces this result by showing that the probability of intra-industry trade increases sharply when trade openness coincides with high GDP asymmetry. This suggests the presence of vertical product differentiation and structural complementarities, especially in low- to medium-tech plastic sectors. Interestingly, the direct impact of COVID-19 on intra-industry trade is statistically insignificant. This indicates resilience in trade flows of plastic products during the pandemic years. However, the interaction of economic asymmetry and trade openness appears to have become more critical in that period. These results challenge conventional “North-South trade” assumptions and highlight the role of policy-driven integration in supporting trade patterns that transcend simple comparative advantage. The study underscores the importance of nuanced policy design that leverages economic diversity alongside market liberalization to foster symmetric trade relationships.