This paper quantifies the size of internal versus external trade barriers and assesses the trade and welfare impact. I develop a quantitative two-sector international trade model featuring nonhomothetic preferences in which Indian states trade both domestically and internationally. I discipline the model using rich data on price dispersion together with state-based foreign and domestic trade flows. I find that (1) internal trade barriers make up 40% of total trade barriers on average, but vary substantially by state depending on the distance to the closest port; and (2) reducing trade barriers across Indian states to the United States level increases welfare more (13%) than removing international import barriers (7%).

本文对内部和外部贸易壁垒的规模进行了量化，并评估了贸易和福利影响。我开发了一种定量的两部门国际贸易模型，该模型具有非同质性偏好，其中印度各州在国内和国际上进行贸易。我使用关于价格分散性的丰富数据以及基于州的外国和国内贸易流来规范模型。我发现（1）内部贸易壁垒平均占总贸易壁垒的40％，但各州之间的差异很大，具体取决于与最近港口的距离；（2）将印度各州的贸易壁垒降低到美国水平，比消除国际进口壁垒（7％）增加的福利增加（13％）。