India is an agrarian economy, and products like spices and cashews are contributing a substantial amount to foreign earnings. India has the potential to offer goods at competitive prices not only in developed markets but also in developing markets around the world. The trade reforms and new economic scenario provide both opportunities and challenges in the world market. In this context, it is essential to examine which factors contribute to the export success of spices and cashews in the world market. The main objective of this chapter was to investigate the determinants of spices and cashew exports (CEs). The determinants of exports are identified as the exchange rate, domestic consumption, world demand and production. The study was carried out using the fully modified ordinary least squares (FMOLS) method. The augmented Dickey–Fuller (ADF) unit root test was used to test stationary, and the Johansen and Juselius cointegration test was used to examine long-run relationships among variables. All time series variables were integrated at order one. The Johansen cointegration test confirmed that there exists a long-run equilibrium relationship between variables. The FMOLS results reveal that variables like domestic consumption, exchange rate and production are the major determining factors for spice export. As far as aggregated CE is concerned, domestic consumption and exchange rate are the major determining factors during the study period.

Export, cashew, spices, world market, determinants