The role of Regional Trade Agreements: in the Case of India

Abstract

A Regional Trade Agreements is expected to increase the intra-regional trade volume and welfare of countries. We argue that a formation of Regional Trade Agreements is an endogenous process in the case of India in the model incorporating both inter- and intraindustry trade. Our Results suggest that a Regional Trade Arrangement is encouraging trade only when the partner countries are already sharing great trade volume. For India, its engagements with the Association of Southeast Asian Nations and East Asia per se are unlikely to boost trade.