Liberalisation, Industry-Specific Factors and Intra-Industry Trade in India

External sector reforms in the nineties were designed to correct the structural distortions and biases that had crept into the economy during the previous two decades. Among these were the bias against exports and in favour of capital intensive industry. The reforms were therefore expected to lead to restructuring and improved efficiently.
This study explores an important aspect of this restructuring, the rationalization of product lines by individual firms, specialization in product lines so as to exploit possible economies of scale, and the consequent growth of intra-industry trade (that is, the simultaneous occurrence of exports and imports within the same industry).