Assessment of interstate dynamics of virtual water trade flows in primary crops production: empirical evidence from India

Abstract

This study examines the interstate virtual water trade flows embodied in wheat and rice products across India's different states and union territories during 1994–2017. Using the extended Leontief's input-output model, this study links the net virtual water trade flows with water scarcity concentration in Indian states. The input-output analyses decompose the water consumption into domestic demand and exports by the states. Empirical results show that the northern states have massive wheat and rice production, leading to the highest virtual water outflows to western and southern water-scarce states in India. Further, results exhibit that virtual water trade has substantial pressure on waterscarce states to become water-saving states. However, we find that water endowments, unsustainable water flows, and diversity lead to water scarcity concentration in water-abundant states.