Abstract

At a time when regional production networks have been resurgent, especially in Asia, why has India’s integration in regional markets had not been deeper? Using highly disaggregated trade data and an analysis of industry perspectives based on semi-structured interviews with a sample of firms and industry associations relevant to India’s trade with ASEAN, the paper found that despite low volumes, vertically specialized trade has been growing between India and ASEAN. Overall, there is significant potential for deepening India’s engagement in ASEAN by expanding intermediates exports in the machinery sector, building on its strong performance in the chemicals sector by expanding the export of higher value specialty chemicals, and in general attempting to move up the value chain in the parts, components and assembled goods exported in the road vehicles and transport equipment product categories and telecommunications and sound recording equipment segments where network exports (assembled end products) are important.
There is tremendous underexploited potential for growth in electronics and related equipment categories (HS 85).