TY  - SER
AU  - Choudhry, Sonam
AU  -  Anshul
AU  -  Narayanan, Abhinav
TI  - Dynamics of Price Transmission: Evidence from India's Import Basket
SN  - 0015-7325
PB  - Foreign Trade Review
KW  -  Price Differential
KW  -  Price Transmission
KW  -  Trade Partners
KW  - India
N2  - This article uses granular information on trade flows between India and its trading-partners to estimate the impact of price changes on the import basket in general. We first investigate whether a change in world prices at the commodity level triggers a reorganisation of trading partners. Second, we examine the degree of transmission of world prices to Indian import prices. Lastly, we look at whether India imports less from countries that charge a higher markup on a product. Our results indicate that a change in world prices does not significantly change the set of importing countries. Using the country product level price changes, we find a higher degree of transmission as compared to the world prices. This provides an important policy implication. In order to determine how the transmission of world prices to import prices works, we need to pay attention to the product price changes in the partner countries rather than focusing on the world prices. Lastly, we find that India imports less of a particular product on average from a country that charges a higher markup for that product relative to the average export prices charged by that country.JEL Codes: F14, F60, F02, Q27
UR  - https://doi.org/10.1177/00157325231158848
ER  -