Assessing gains from India's regional trade agreements: impact on India's exports

The number of regional trade agreements (RTAs) has grown enormouslyover the last decade. India has also embraced regionalism in a big way. In the past decade, it has actively pursued the bilateral and regional routes to trade liberalisation. In this context, in the present paper we want to study whether and by how much India has gained from the RTAs she has entered into in terms of her exports. We have attempted to capture the trade effects of 11 RTAs. This analysis has been done using the Gravity Model approach. The model has been estimated by using pooled OLS method based on panel data for 53 countries for the period 1999–2012. The results indicate NAFTA and EU havemarginal trade diversion effects on India's exports. Another important finding is in terms of the trade impact of ASEAN, where our results suggest no trade diversion effect but in fact asmall trade creation effect. The estimation results further indicate that although India's exports does not seem to have gained much from RTAs formed with Japan, Korea, Thailand and Malaysia, it has certainly received a great boost from SAFTA, AFTA, India-Sri Lanka FTA and India-Singapore CECA. Thus, on balance, India has gained from the RTAs, she has entered into.