Trends in Net Barter Terms of Trade and Macroeconomic Indicators in India: 1980-2024

Abstract

This study examines the relationship between net barter terms of trade (TOT) and macroeconomic indicators in India over the period 1980–2024. This study uses the time-series data to examine the relationship between India’s net barter terms of trade and macroeconomic indicators such as GDP growth rate, Inflation (CPI), Exchange Rate and Fiscal deficit. The study concludes that when net barter terms of trade improve GDP growth rate increases, increases investment, fiscal and external pressures are reduced. Conversely, when Net barter terms of trade deteriorate, Inflation increases, Fiscal deficit increases and currency depreciation occurs, which undermine macroeconomic stability.