The paper attempts to understand the interlinkages and causal relationship between the Nasdaq composite index in the US, the Nikkei in Japan with that of NSE Nifty and BSE Sensex in India during the period January 1999 to August 2004, using daily closing data. The Johansen co-integration test is applied to measure the long-term relationship between the two indices and the Granger-causality test is used to check the short-term causal relationship. The analysis reveals that there is no long-term relationship of the Indian equity market with that of the US and Japanese equity markets. Further, Nasdaq and Nikkei have stronger causal relationship in 1999–2001 which becomes either very weak or disappears in 2002–2004. There seems to be a disassociation in the movements of the Nasdaq and Nikkei with that of the Sensex and Nifty. When the stock markets have no tendency to move together in the long-term and causal effects become weak in the short-term then the markets are segmented and provide ample room for diversification of investments. The recent surge of FII investments to the Indian equity market is primarily a reflection of this trend.

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India–Gulf Co-operation Council (GCC) countries trade relation has intensified in the last two decade. GCC is one of the largest trading partners of India. In this paper, an attempt has been made to explore India’s trade potential with GCC countries at HS-2 digit for the period 2001–2014. Various trade indices have been calculated to infer about mutual trade potential. The findings of this study reveal that India’s trade is more intense with GCC countries compared with its trading patterns with rest of the word. The study shows that there are several sectors in which India has an opportunity to increase its trade with GCC countries. Overall results show that India’s trade relation with GCC countries is increasing continuously but still there is lot of untapped potential to bring the welfare gains for both partners. Finally, the study concludes that the proposed economic integration in terms of a free trade agreement between India and GCC will be mutual welfare enhancing and a case of win–win situation.

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