Abstract/Summary

This paper investigates how trade liberalisation has contributed to a dietary shift from one dominated by traditional staples to one high in animal products, a trend that is associated with both improved intake in micronutrients, and higher rates of obesity and other diet-related diseases in developing countries. In the context of India’s trade liberalisation in 1991, we examine whether the difference in consumption of cereals and animal products across rural regions before and after the reforms can be attributed to their differential degree of exposure to tariff reductions. The estimates reveal that trade reforms have a negative impact on cereal consumption through reducing edible oil prices and a positive effect on the consumption of animal products through enhancing consumer tastes towards these foods. These findings provide evidence for the role of trade in supporting dietary diversity and highlight the need for complementary policies to enhance the coherence between trade policy and nutrition actions.