Linsy Mathew

In recent times, macroeconomic factors have become a central focus of interest in international trade research. The economic environment in international trade directly affects trade performance and the global market. The study analyzes the export performance of Indian textile exports and the macroeconomic factors influencing them from the perspective of export destinations. The study incorporates the key macroeconomic variables, including exchange rate, interest rate, Gross Domestic Product (GDP) per capita, the inflation rates of export destination countries, and crude oil prices. The study includes secondary data gathered on a monthly basis, employing the vector auto-regressive (VAR) model and the Granger causality test to analyze the dynamic linkages and causal relationships between the variables in the study. The Granger causality test results revealed that Japan’s and South Africa’s GDP (p < 0.05) impacts India’s textile exports to these countries. Additionally, the inflation in Japan (p < 0.05) affects the performance of Indian textile exports. The VAR model further revealed that the USA’s and China’s interest rate, Japan’s exchange rate, GDP, and interest rate, as well as South Africa’s GDP, significantly influence the export performance of Indian textiles.