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India's Trade Linkage with Asean: An Econometric Study

Author

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  • Amal Sarkar

Abstract

India has put an emphasis on enhancing trade relations with ASEAN region in early 1990s. As a result, India's export to ASEAN has significantly increased in recent years. However, the ASEAN financial crisis had left negative impact on India's export to ASEAN region. From the modelling exercise of the paper, the price and import elasticities of export flows attracts a great deal of attention because of its significant implications on India's export earnings from ASEAN. As the time series data involves non-stationary on their level, the Phillips-Hansen's Fully Modified (FM) method has been applied to get the estimated values of elasticity. The result suggests that India's export is significantly influenced by ASEAN economic growth. Further, it is very much price competitive in the ASEAN market. In other words, the devaluation of India rupee will be helpful for expanding India's export to this region.

Suggested Citation

  • Amal Sarkar, 2009. "India's Trade Linkage with Asean: An Econometric Study," Foreign Trade Review, , vol. 44(1), pages 26-43, April.
    • Handle: RePEc:sae:fortra:v:44:y:2009:i:1:p:26-43
    DOI: 10.1177/0015732515090102
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