Competitiveness, trade direction, and exporter constraints: A statistical analysis of Indian dry chilli exports

Abstract:

India is a dominant global player in the spice sector, with dry chilli being its most strategically significant crop. This study analyses the export competitiveness, trade direction and exporter constraints of Indian dry chilli over a twenty-year period (2004-05 to 2023-24) using Revealed Comparative Advantage (RCA), the Markov-chain approach and Garrett’s ranking technique. The RCA analysis reveals that India maintains an immense and uninterrupted comparative advantage in the global dry chilli market, consistently scoring well above the baseline threshold across the two decades. Furthermore, the transitional probability matrix indicates a massive structural pivot in target markets. While traditional markets like Sri Lanka and the USA exhibited extreme volatility and low retention rates, China experienced an explosive surge, cementing itself as India's premier and most stable competitive destination with an overwhelming 93.86 per cent market retention rate. Finally, Garret's ranking of fourteen constraints identified economic volatility-specifically the uncertainty in dry chilli pricing and currency rate fluctuations-as the most severe challenges burdening Indian exporters, whereas product quality and financial transfer delays were deemed minor concerns.