A gravity model analysis for the renewable energy trade potential in India, South Asia and Southeast Asia

The member countries of the Association of Southeast Asian Nations (ASEAN) and South Asian Association for Regional Cooperation (SAARC) are important markets for India's renewable energy products whereas the renewable energy trade potential of India with these countries is less explored. This work develops a gravity model of bilateral trade flow for comparing the actual and projected exports to the above countries and estimating the effects of various determining factors of international trade, such as trade logistics, bilateral distance, tariff rate and others. A matured trade relationship was derived with SAARC for hydroelectricity (Hydro) and solar plus wind energy (Solar-Wind) parameters whereas a growing trade potential of Solar-Wind was noted for ASEAN. The overall country-wise trade potential comparison showed a fall of 73.33% in 2010 to 46.67% in 2019 for Hydro implying a matured trade prospect. For Solar-Wind, however, the 57.2% in 2010 has increased to 64.3% in 2019 indicating a high trading potential in Solar-Wind, particularly in the ASEAN countries. Thus the large trading prospective in Solar-Wind may be treated as a future policy issue and the ASEAN countries may be focused as future prospective markets of renewable energy product exports.