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

Author

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  • Sarath Chandran, B.P.

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.

Suggested Citation

  • Sarath Chandran, B.P., 2010. "Trade Complementarity and Similarity Between India and Asean Countries in the context of the RTA," MPRA Paper 29279, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:29279
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    File URL: https://mpra.ub.uni-muenchen.de/29279/1/MPRA_paper_29279.pdf
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    References listed on IDEAS

    as
    1. Richard E. Baldwin, 1997. "The Causes of Regionalism," The World Economy, Wiley Blackwell, vol. 20(7), pages 865-888, November.
    2. Imre Fert– & L. J. Hubbard, 2003. "Revealed Comparative Advantage and Competitiveness in Hungarian Agri-Food Sectors," The World Economy, Wiley Blackwell, vol. 26(2), pages 247-259, February.
    3. Arvind Panagariya, 2000. "Preferential Trade Liberalization: The Traditional Theory and New Developments," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 287-331, June.
    4. Amita Batra & Zeba Khan, 2005. "Revealed comparative advantage: An analysis for India and China," Indian Council for Research on International Economic Relations, New Delhi Working Papers 168, Indian Council for Research on International Economic Relations, New Delhi, India.
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    Cited by:

    1. Jagadambe, Subhash, 2016. "Analysis of export competitiveness of Indian agricultural products with ASEAN countries," Working Papers 356, Institute for Social and Economic Change, Bangalore.

    More about this item

    Keywords

    Regional Trade Agreement; Revealed Comparative Advantage; Trade Intensity Index; ASEAN; India;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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