Association of energy poverty, import and export diversification with agricultural sector performance in South Asia

Abstract

This paper examines the association between energy poverty, import diversification, export diversification, and agricultural sector performance in South Asia, while controlling for carbon dioxide emissions from agriculture and employment in agriculture. Using panel data for eight South Asian countries—Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka—covering the period from 2000 to 2023, the study constructs an Energy Poverty Index through Principal Component Analysis based on six energy-related indicators. The Feasible Generalized Least Squares results show that better energy conditions and lower energy poverty are positively associated with agricultural sector performance. In contrast, import diversification and carbon dioxide emissions from agriculture are negatively associated with agricultural sector performance, while export diversification is positively associated with it. Employment in agriculture shows a positive but statistically insignificant association. These findings remain robust when Panel-Corrected Standard Errors and Driscoll–Kraay standard error estimators are applied. Overall, the results suggest that improved energy access, environmentally sustainable agricultural practices, and strategic trade diversification are closely linked to agricultural sector performance in South Asia.