NEW DELHI: When the GST proponents talk of 'one tax, one market , one India ' as the aim for the national levy, the Economic Survey 2016-17 has found that India's internal trade is already quite robust."India's aggregate interstate trade (54 per cent of GDP ) may not be as high as that of the United States (78 per cent of GDP) or China (74 per cent of GDP) but substantially greater than provincial trade within Canada and greater than trade between Europe Union (EU) countries (which is governed by the "four freedoms": allowing unfettered movement of goods, services, capital, and people)," it says.This is all the more striking since the data covered in the analysis is mainly of manufactured goods and excludes agricultural products."Contrary to the caricature, India's internal trade in goods seems surprisingly robust. This is true whether it is compared to India's external trade, internal trade of other countries, or gravity-based trade patterns in the United States." says the survey. For example, the effect of distance on trade seems lower in India than in the US.The analysis was done on the basis of a new 'Big Data' set available from the Goods and Service Tax Network (GSTN-invoice level data on interstate movement of goods).One plausible explanation for India's high internal trade is the current structure of domestic taxes as well as area-based tax exemptions might actually bias economic activity towards more internal trade."The Central Excise Act exempts manufacturing in certain states from excise duty, including all the North-eastern states, Sikkim, Jammu and Kashmir, Uttarakhand, Himachal Pradesh and Kutch in Gujarat," the survey says. "This exemption creates a strong incentive to shift real or reported production to these areas over what might be dictated by comparative advantage, trade costs and other traditional determinants of trade and firm location."