Growth and pattern of intra-industry trade between India and Bangladesh: 1975?2010

The present study investigates the intra-industry trade between India and Bangladesh over the period of 1975 to 2010. GL index is used to calculate intraindustry trade at the three-digit level of SITC. The study also calculated the trade complementarity index, and revealed comparative index. The extent of intra-industry trade is high in sectors like crude materials, inedible, except fuels, food and live animals. The study also reveals mismatch between Indian imports and Bangladesh exports. The present study indicates positive effect on consumer surplus and trade using SMART model. Finally, the paper suggests that Bangladesh should diversify his export structure to reduce the bilateral trade deficit on the basis of comparative advantage.