an analysis for india and china - icrier

commodities. These 1272 commodities are then aggregated at the 2-digit and 3-digit level
of SITC classification. This, then becomes the basis for the analysis of comparative
advantage according to factor intensity.
Factor Intensity Analysis at the Two Digit Level
At the 2-digit level, three classification systems have been adopted. These are the
UNCTAD, OECD, Anderson and Garnaut (1980) system of classification. The analysis
in this section is undertaken using the UNCTAD classification (with some inputs based
on OECD classification) system as it is the most comprehensive classification based on
details relating to human capital, technology and capital intensity of the manufactured
commodities. The following trends emerge.
India’s comparative advantage is observed to be predominantly in the labor
intensive and resource intensive commodity category. Of the total 1512 manufactures
where India enjoys comparative advantage in the world market, 573 are resource and
labor intensive as per the UNCTAD classification system. This is followed by the
category (IV) in the UNCTAD classification. Category IV commodities are those, the
manufacture of which, makes a high demand for the four criteria viz skill, technology,
capital and scale in comparison with the categories II and III which demand low and
medium levels respectively of these four criteria. Category IV has 301 commodities
while there are 191 commodities in category II and 134 commodities in category III. The
OECD system also classifies the maximum number of commodities i.e. 687 as resource
(56) and labor intensive (631). (Refer Appendix Table A.12)
Among the resource and labor intensive manufactures based on UNCTAD
classification, sectors like textiles (yarn, fabric, made-up articles n.e.s and related
products) and articles of apparel and clothing accessories dominate.
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