Comparison of trade complementarities between India and ASEAN countries

Abstract

Inferences from the trade indices computed for understanding the trade structure between India and ASEAN reveal that there are complemetary sectors and products available for enhancing trade cooperation between the trading partners. ASEAN countries are in different stages of economic development and India can have trade cooperation with some of them in all product categories. While India can export food grains to small and developed countries of ASEAN, it can import edible and other agricultural products from other ASEAN countries. India enjoys advantage in minerals whereas it can import crude oil from ASEAN. India possesses advantage in some manufactured items like chemicals, iron and steel, jems and jewellery and can export them to many ASEAN countries. ASEAN has comparative advantage in electrical and electronic components and India can import them from ASEAN. With regard to textiles and clothing, there is intense competition between ASEAN and India to increase market share. India's average tariff is higher than ASEAN countries and reduction of tariffs from RTA will have short-term adverse impact on India's exports but can consolidate in the medium term through productivity gains and efficiency. Also, emerging global economic structure warrants greater cooperation from India in the regionalization efforts of Asia.