Can India plug into Asian international production networks through RTAs?

aut.conference.typePublished Abstract
aut.researcherSen, Rahul
dc.contributor.authorSen, R
dc.contributor.authorSrivastava, S
dc.contributor.authorBadri Narayanan, G
dc.contributor.editorButler, D
dc.contributor.editorMangano, M
dc.description.abstractRecent literature has focused attention on the important question of whether the current trend of proliferation of bilateral and regional trade agreements can facilitate creation and development of international production networks (IPNs) among member countries. However, majority of these adopt a partial equilibrium approach, thus ignoring the economy wide impact. As India gets increasingly integrated through calibrated globalization of its economy over the past two decades and creates a web of such trade agreements, this paper attempts to specifically analyze the effect of recent RTAs involving India on its ability to plug into IPNs in Asia by changing international trade and production patterns. The auto-parts industry, identified as one of the high-growth sectors for India’s manufacturing sector, with a potential to integrate into existing Asian IPNs, is chosen for this analysis. The paper reviews the current state of India’s participation in Asian IPNs identifying the policy challenges, and further undertakes an applied general equilibrium analysis of the above issue by utilizing the GTAP 8 database based on 2004 data to simulate the impact of tariff reduction in auto-parts for India’s currently implemented FTAs with ASEAN, Japan, Korea and EU. Additional scenarios of a productivity improvement along with reduction in trade costs along with the RTA, are also explored. The paper analyses the impact of these policy shocks on output, prices and trade volumes ,as well as their impact on overall welfare changes across all regions. The results point to the evidence that India that there are significant gains for India and its trading partners through export expansion and welfare improvements from better resource allocation not from an RTA alone, but from productivity improvement and reductions in trade costs as this should not only reduce border trade costs, but also network costs set up for an IPN.
dc.identifier.citation42nd Australian Conference of Economists (ACE) 2013 held at Murdoch University, Perth, WA, 2013-07-07 to 2013-07-10, published in: Beyond the Frontiers: New Directions in Economics
dc.publisherMurdoch University
dc.rightsNOTICE: this is the author’s version of a work that was accepted for publication. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in (see Citation). The original publication is available at (see Publisher's Version).
dc.subjectInternational Production Networks
dc.subjectRegional Trade Agreements, GTAP model
dc.subjectTrade costs
dc.titleCan India plug into Asian international production networks through RTAs?
dc.typeConference Contribution
pubs.organisational-data/AUT/Business & Law
pubs.organisational-data/AUT/Business & Law/Economics
pubs.organisational-data/AUT/Business & Law/Economics/Economics PBRF 2012
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