Oil Prices, Environmental Protection,and India’s LCT Exports to OECD Markets:A Gravity Model Approach

Abstract

Amidst heightened concerns over cross-border transfer of cleaner and greener products, this paper examines how oil import price fluctuations and environmental protection expenditure in OECD countries influence India’s low-carbon-technology (LCT) exports, aligned with SDG 7, SDG 13, and SDG 17. Employing a Poisson Pseudo Maximum Likelihood estimator with a structural gravity model for 24 OECD countries between 2002–2021, the analysis uncovers asymmetric dynamics. Rising oil import prices significantly stimulate India’s LCT exports through heightened demand for energy  substitutes, whereas increased OECDs’ environmental protection expenditure suppresses imports by virtue of enhanced domestic green manufacturing capacities. These findings challenge the conventional assumption that greater environmental expenditure universally expands global clean-tech trade. India’s export competitiveness in solar PV, wind, and EV components underscores its potential to leverage OECD’s China+1 diversification strategies and trade realignments. Policy coherence with Sustainable Development Goals (SDGs) standards, R&D intensity, and multilateral climate  cooperation emerges as critical for sustaining LCT export growth.