Trade Complementarity and Similarity Between India and Asean Countries in the context of the RTA

B.P. Chandran ()

MPRA Paper from University Library of Munich, Germany

Abstract: The post WTO world trading system is witnessing proliferation of large number of Regional Trade Agreements (RTAs). Regionalism versus Multilateralism debate is not resolved decisively as there are divergent views on the methodology of trade liberalization. The slow pace of multilateral negotiations and lack of consensus among members on major trade issues is undermining the role of WTO and hastening the regionalism process. India after its initial reluctance, exploring the path of regionalism to improve trade performance and to acquire leadership role on regional issues. Realising the importance of East Asia in the emerging global economic order, India signed a FTA with ASEAN which will come in to force from 1st January 2010. For any Regional Trade Agreement (RTA) to be successful, it is imperative on partner countries to have favourable trade structure between them. In this context, the paper looked in to the trade structure of India and ASEAN countries to identify complementary sectors and product groups for enhanced trade cooperation. Trade indices such as Trade Intensity Index (TII) and Revealed Comparative Index (RCA) are constructed for 16 product group to get trade complementarity and Similarity. From the analysis it is revealed that there are complementary sectors and products available between India and ASEAN for greater cooperation. While India got comparative advantage in Food grains, Minerals, Chemicals, Jems and Jewellery and manufactured products, ASEAN countries are in an advantageous position in Electrical goods, electronic products, vegetable oils, rubber products and agricultural products.

Keywords: Regional Trade Agreement; Revealed Comparative Advantage; Trade Intensity Index; ASEAN; India (search for similar items in EconPapers)
JEL-codes: F10 F14 F15 (search for similar items in EconPapers)
Date: 2010-08-07
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (7)

Published in The Indian Economic Journal December 2010.Specia(2010): pp. 111-117

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