Indo‐ASEAN Trade Complementarity and Favourability with Transition from Look East to Act East Policy: Evidence from Northeastern States of India

Abstract

AbstractThe purpose of this paper is to access the effectiveness of policy initiatives on the emerging trend of Indo‐ASEAN trade by answering the critical question of whether the implementation of the Look East Policy (LEP)/Act East Policy (AEP) influences the growth trends and trade complementarities in India’s trade with the ASEAN countries for the period 1990–2018? The result reveals that both import and export increased in India during the AEP period, but unlike the LEP period, AEP period shows negative growth. It is found that India’s exports and imports are intense with ASEANs compared with its trading pattern in the rest of the world. It can also be observed that coefficient of time dummy has a positive significant relationship with India’s bilateral export of merchandized product to ASEAN countries. The study observes five breaks on the growth of export, import and total trade, spread over three decades. Further, the growth and volume of trade was found to be highest via Land Custom Stations (LCS) Moreh amongst all LCS of northeastern states during the period of AEP.