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Ex-Ante Evaluation of India’s Trade Alliance with Indo-Pacific Region: A General Equilibrium Analysis

Author

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  • Archana Srivastava
  • Somesh Kumar Mathur
  • Prabir De

Abstract

The study attempts to analyse the economy-wide impact of Indo-Pacific alliance between India and rest of the 45 participating members using computable general equilibrium (CGE) model. We introduce four simulation scenarios in the general equilibrium model. The first scenario is the one in which India bilaterally liberalises trade in terms of both tariffs liberalisation alone and then removal of tariffs and reduction of non-tariff barriers together with all the countries of Indo-Pacific region. The second scenario is when India bilaterally liberalises trade with all the Asian countries of the Indo-Pacific region. The third scenario is when India bilaterally liberalises trade with all the countries of the Indo-Pacific region but excludes China from the region because of the current geopolitical reasons. The fourth scenario is the one when free trade is considered among all the countries in the Indo-Pacific region. The Indo-Pacific alliance seems to go beyond strategic alliance with the 46 Indo-Pacific participating countries, wherein the members gain due to potential movement of capital and welfare and economic gains because of tariff and non-tariff liberalisation among the member countries. The article suggests the road map for maximum welfare gains for India, keeping strategic and economic engagements with other member countries and sub-regions. JEL Code: F15

Suggested Citation

  • Archana Srivastava & Somesh Kumar Mathur & Prabir De, 2023. "Ex-Ante Evaluation of India’s Trade Alliance with Indo-Pacific Region: A General Equilibrium Analysis," Foreign Trade Review, , vol. 58(2), pages 220-245, May.
    • Handle: RePEc:sae:fortra:v:58:y:2023:i:2:p:220-245
    DOI: 10.1177/00157325221137945
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    References listed on IDEAS

    as
    1. Mohammad Masudur Rahman & Chanwahn Kim & Prabir De, 2020. "Indo-Pacific cooperation: what do trade simulations indicate?," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-17, December.
    2. Park, Cyn-Young & Petri, Peter A. & Plummer, Michael G., 2021. "The Economics of Conflict and Cooperation in the Asia-Pacific: RCEP, CPTPP and the US-China Trade War," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 25(3), pages 233-272, September.
    3. Walmsley, Terrie & Ahmed, Syud Amer & Parsons, Christopher, 2005. "The Impact of Liberalizing Labor Mobility in the Pacific Region," GTAP Working Papers 1874, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    4. Heiduk, Felix & Wacker, Gudrun, 2020. "From Asia-Pacific to Indo-Pacific: Significance, implementation and challenges," SWP Research Papers 9/2020, Stiftung Wissenschaft und Politik (SWP), German Institute for International and Security Affairs.
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    More about this item

    Keywords

    GTAP 10; welfare effects; tariff and non-tariff barriers; VGDP; sectoral impacts; equivalent variation; Asia-Pacific alliance;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration

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