Leveraging FinTech for Trade Competitiveness: Evidence from India

Abstract

This study examines how FinTech-related structural factors influence India’s international trade flows using annual data from 2010-2023. Employing time-series regressions with standard diagnostic tests, the analysis evaluates the role of FinTech through two channels: domestic market size and foreign direct investment (FDI). The results show that FDI has no significant effect on export or import growth, whereas changes in domestic market size exhibit a strong, statistically significant positive relationship with both trade components. These findings suggest that FinTech enhances trade primarily by expanding and formalizing the domestic market through digital payments, SME credit access, and efficient financial infrastructure. The study underscores FinTech’s role as a trade-enabling ecosystem supporting India’s global integration.