This article investigates the impacts on the India–Association of Southeast Asian Nations (ASEAN) Free Trade Agreement (IAFTA) on trade creation and trade diversion. The gravity model is employed, where multilateral resistance terms are included. A panel data set of 45 countries that included India, ASEAN-10 nations and India’s top 34 trading partners in 2018 were used for the period from 1996 to 2018. The article explored that IAFTA leads to a trade creation in total bilateral trade in terms of exports and imports. The analysis further explored that the import creation effect was higher than that of the export creation effect.
AndersonJ. E. (2011). The gravity model. Annual Review of Economics, 3(1), 133–160.
2.
AndersonJ. E., & van WincoopE. (2003). Gravity with gravitas: A solution to the border puzzle. American Economic Review, 93(1), 170–192.
3.
AsherM. G., & SenR. (2005). India–East Asua integration: A win-win for Asia. Economic and Political Weekly, 40(36), 3932–3940.
4.
BaierS. L., & BergstrandJ. H. (2007). Do free trade agreements actually increase members’ international trade?Journal of International Economics, 71(1), 72–95.
5.
BaierS. L., & BergstrandJ. H. (2009). Estimating the effects of free trade agreements on international trade flows using matching econometrics. Journal of International Economics, 77(1), 63–76.
6.
BaldwinR. (1994). Towards an integrated Europe. Centre for Economic Policy Research.
7.
BaldwinR., & TaglioniD. (2006). Gravity for dummies and dummies for gravity equations (Working paper 12516). National Bureau of Economic Research.
8.
BhattacharyyaR., & MandalA. (2010). Estimating the impact of the Indo-ASEAN free trade agreement on India’s balance of trade. ResearchGate. https://www.researchgate.net/publication/46533877
9.
BhattacharyyaR., & MandalA. (2014). Estimating the impact of the India-ASEAN free trade agreement on Indian industries. South Asia Economic Journal, 15(1), 93–114.
10.
BhattacharyyaR., & MandalA. (2016). India-ASEAN free trade agreement: An ex post evaluation. Journal of Policy Modeling, 38(2), 340–352.
11.
BrulhartM., & KellyM. (1999). Ireland’s trading potential with central and eastern countries. Economics and Social Review, 30(2), 159–174.
12.
CarrѐreC. (2006). Revisiting the effects of regional trade agreements on trade flows with proper specification of the gravity model. European Economic Review, 50, 223–247.
13.
ChandranB. P. S. (2012). Implications of India-ASEAN FTA on India’s fisheries sector (MPRA Paper No. 38712). https://mpra.ub.uni-muenchen.de/38712/
14.
ChandranB. P. S. (2018). Trade impacts of the India-ASEAN free trade agreement (FTA): An augmented gravity model analysis (MPRA Paper No. 84183). https://mpra.ub.uni-muenchen.de/84183/
15.
DaiM., YotovY. V., & ZylkinT. (2014). On the trade-diversion effects of free trade agreements. Economics Letters, 122, 321–325.
16.
EggerP. (2000). A note on the proper econometric specification of the gravity equation. Economics Letters, 66(1), 25–31.
17.
EndohM. (1999). Trade creation and trade diversion in the EEC, the LAFTA and the CMEA: 1960–1994. Applied Economics, 31, 207–216.
18.
FrankelJ. A., SteinE., & WeiS.-J. (1996). Regional trading arrangements: Natural or supernatural?American Economic Review, 86(2), 52–56.
19.
GrosD., & GonciarzA. (1996). A note on the trade potential of Central and Eastern Europe. European Journal of Political Economy, 12(4), 709–721.
20.
HurJ., & ParkCh. (2012). Do free trade agreements increase economic growth of the member countries?World Development, 40(7), 1283–1294.
21.
JagdambeS. & KannanE. (2020). Effects of ASEAN–India Free Trade Agreement on Agricultural Trade: The Gravity Model Approach. World Development Perspectives. https://doi.org/10.1016/j.wdp.2020.100212
22.
LeeJ. W., & OhJ. (2020). ASEAN or plus alpha? The effectiveness of regional economic cooperation. Asia Pacific Management Review, 25, 48–53.
23.
LiuB., & DevadossS. (2013). Effects of trade diversion and trade creation of MERCOSUR on US and world apple markets. Applied Economics, 45(32), 4474–4486.
24.
MartinP., MayerT., & ThoenigM. (2012). The geography of conflicts and regional trade agreements. American Economic Journal: Macroeconomics, 4(4), 1–35.
25.
Martínez-ZarzosoI., Nowak-LehmannD. F., & HorsewoodN. (2009). Are regional trading agreements beneficial? Static and dynamic panel gravity models. North American Journal of Economics and Finance, 20(1), 46–65.
26.
NagoorB. H. & KumarN. C. (2010). Assessing the impact analysis of the ASEAN-India FTA on the tea industry. Economic and Political Weekly, 45(44/45), 112–116.
27.
NilsonL. (2000). Trade integration and the EU economic membership criteria. European Journal of Political Economy, 16(4), 807–827.
28.
NITI Aayog. (2017). A note on free trade agreements and their costs. National Institution for Transformation India (NITI), Government of India.
29.
RatnaR. S., & KallummalM. (2013). ASEAN-India free trade agreement (FTA) and its impact on India: A case study of fisheries and selected agricultural products. Foreign Trade Review, 48(4), 481–497.
30.
RoseA. K., & van WincoopE. (2001). National money as a barrier to international trade: The real case for currency union. American Economic Review, 91(2), 386–390.
31.
RussK. N., & SwensonD. L. (2019). Trade diversion and trade deficits: The case of the Korea–U.S. free trade agreement. Journal of The Japanese and International Economies, 52, 22–31.
32.
SenR., AsherM. G., & RanjanR. S., (2004). ASEAN-India economics relations: Current status and future prospects. Economic and Political Weekly, 39(29), 3297–3308.
33.
SikdarC., & NagB. (2011, Nov). Impact of India-ASEAN free trade agreement: A cross-country analysis using applied general equilibrium modelling (Working Paper Series, No 107). Asia-Pacific Research and Training Network on Trade.
34.
SinghM. L. (2014). Institutional development leading trade development: A case study in India-ASEAN bilateral trade. Foreign Trade Review, 49(1), 177–191.
35.
SunL., & ReedM. R. (2010). Impacts of free trade agreements on agricutural trade creation and trade diversion. American Journal of Agricultural Economics, 92(5), 1351–1363.
36.
The Economic Times. (2018, May25). Made in China mobiles could be imported via ASEAN to Evade Duty. The Economic Times. https://economictimes.indiatimes.com/news/economy/foreign-trade/made-in-china-mobiles-could-be-imported-via-asean-to-evade-duty/articleshow/64312956.cms
37.
The Economic Times. (2019, October7) India’s trade with its FTA partners: Experiences, challenges and way forward. The Economic Times. https://economictimes.indiatimes.com/blogs/et-commentary/indias-trade-with-its-fta-partners-experiences-challenges-and-way-forward/
38.
The Economic Times. (2020). India may step up scrutiny of imports from Chinese cos in ASEAN countries. The Economic Times. https://economictimes.indiatimes.com/news/economy/foreign-trade/trade-pacts-under-lens-as-india-seeks-to-check-chinese-imports/articleshow/76501540.cms
39.
VeeramaniC., & SainiG. (2011). Impact of ASEAN-India preferential trade agreement on plantation commodities: A simulation analysis. Economic and Political Weekly, 46(10), 83–92.
YangS., & Martinez-ZarzosoI. (2014). A panel data analysis of trade creation and trade diversion effects: The case of ASEAN-China free trade area. China Economic Review, 29, 138–151.
