Pollution haven hypothesis and the bilateral trade between India and China

Abstract

The pollution haven hypothesis is studied from a bilateral trade perspective in this study, taking the reference of two Asian giants, namely, India and China. For this purpose, trade in pollution-intensive industries is analysed using data collected from the United Nations Comtrade dataset based on Standard Industrial Trade Classification codes for 1992-2019. The analysis helps us argue that between the two, China's demand is more pollution-intensive and India is the major supplier of pollution-intensive products. From an environmental perspective, this implies that China seems to be gaining from trade, and India is becoming a pollution haven in its trade with China.