INDIA AND ASEAN TRADE: AN OVERVIEW

IRJC International Journal of Social Science & Interdisciplinary Research____________________________ ISSN 2277 3630 Vol.2 (2), FEBRUARY (2013) Online available at indianresearchjournals.com

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INDIA AND ASEAN TRADE: AN OVERVIEW

MRS. SARIKA CHOUDHARY

HEAD & ASSISTANT PROFESSOR (ECONOMICS)

DYAL SINGH COLLEGE, KARNAL (HARYANA)

________________________________________________________________________

ABSTRACT

Regional integration arrangements are popular phenomenon of the present global

economic order and this feature is now an acknowledged future of the international scene.

Regionalism has existed for so many years in various parts of the world, but it has never

risen as rapidly as in the last two decades. Presently, practically all countries are members

of at least one regional bloc. Currently, there are several sub regional groupings in Asia

that have regional economic cooperation initiatives for e.g. SAARC (1985), APEC (1989),

SAFTA etc. Some members of these sub regional groupings have bilateral RTAs with

other countries within and outside Asia. In south-east Asia, ASEAN (1967) is one of the

oldest and dynamic regional groups. ASEAN (Association of South East Asian Nations) is

today a dynamic, rapidly growing regional group that strives to effectively manage both its

diversity and growth. Trade is a major priority and an important engine for growth in the

region. ASEAN economies have the highest trade to GDP ratio in the developing world.

From 1990 to 2009, ASEAN trade experienced a per annum growth rate of over 10

percent. Similar to ASEAN economy, India has also attained a place of prominence at the

global stage. In 2009, India’s GDP was valued at US$1.846trillion, making it the 9th

largest economy in the world or fourth largest by purchasing power adjusted exchange

rates. India’s growth rate, which has averaged 8.5 percent a year in recent years, is

expected to double the average per capita income within a decade. Therefore, the two

regional markets can be combined to yield a market of huge potential for growth and

investment by both domestic and international investors. In this context, the present study

is an attempt to understand the trends of India and ASEAN trade for the period 1980-2009.

The objective of this paper is to analyze the growth and direction of Indo-ASEAN trade

and it is an attempt to explore the reasons of changing direction of India’s trade with

ASEAN.

KEYWORDS: ASEAN, Trends, Direction, SITC-2, UNCOMTRADE.

________________________________________________________________________

INTRODUCTION

India’s growing profile has attracted countries of South-East Asia to foster closer

engagement at regional and multilateral level. India and ASEAN set up various institutions

mechanisms like India- ASEAN Business Council, India – ASEAN Business Summit,

India – ASEAN Negotiation Committee etc. to overcome the barriers in deepening

interactions. India-ASEAN Trade in Goods (TIG) Agreement came into force since

January, 2010 has been another landmark development in greater integration of Indian


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economy with that of ASEAN. The growing realization that both regions are

complementary rather than competitive, has given a further boost to trade and economic

engagements. As a result, in the last four years, the bilateral trade has increased by more

than 90 percent from US $ 23 b in 2005 to US $ 44 b by 2009-10.Therefore, it is necessary

and useful to analyze the trends and direction of Indo-ASEAN trade for the period 1980-

2009. To analyze, Indo-ASEAN trade at aggregate level, and to explore the importance of

Indo-ASEAN trade, the share of India in ASEAN trade as well as share of ASEAN in

India’s trade has been analyzed. To know the direction of India’s trade with ASEAN, it is

essential to look into the country- wise share and growth in trade overtime.

DATA SOURCES AND METHODOLOGY:

The data has been collected from UN-COMTRADE Statistics Division at 1 digit SITC

(Standard International Trade Classification) Rev. 2 for the period 1980-2009. Alternative

sources of data are : IMF – Foreign Trade Statistics yearbook and ASEAN Merchandise

Trade Statistics Database. The data comprises exports and imports of India and ASEAN

(10 countries i.e. Brunei, Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia,

Myanmar, The Philippines, Singapore, Thailand and Vietnam). For calculating the share

of ASEAN in the India’s Exports and Imports and India’s share in ASEAN trade,

percentage method is used. To calculate growth trends, Test of significance with

regression coefficients has been implied.

RESULTS AND DISCUSSION:

EXPORTS AND IMPORTS OF INDIA AND ASEAN: 1980-2009

The present section provides an overview of India’s share in ASEAN trade as well as

ASEAN share in India’s trade. Further, to explore the growth of trade between the two

regions, growth rate of India’s trade with ASEAN on the whole and ASEAN countries has

been calculated:


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TABLE: I

SHARE OF INDIA’S EXPORTS IN ASEAN IMPORTS: 1980-2009

Years ASEAN Imports(m$)

India’s Exports to ASEAN(m$)

Share of India in ASEAN Imports (in %)

1980 63913 251.79 0.39

1981 71526 298.05 0.42

1982 74948 293.77 0.39

1983 76764 268.98 0.35

1984 74215 242.76 0.33

1985 64445 213.60 0.33

1986 62215 309.65 0.50

1987 78019 379.90 0.49

1988 103409 400.19 0.39

1989 126318 678.58 0.54

1990 159284 905.54 0.57

1991 180219 1003.24 0.56

1992 197484 1369.34 0.69

1993 225777 1650.01 0.73

1994 272784 1842.97 0.68

1995 341443 2697.69 0.79

1996 359188 2855.09 0.79

1997 367296 2462.37 0.67

1998 273919 1623.84 0.59

1999 294621 2227.00 0.76

2000 365350 2660.83 0.73

2001 338664 3315.11 0.98

2002 355047 4503.30 1.27

2003 397928 5071.80 1.27

2004 501222 7552.22 1.51

2005 576451 10285.77 1.78

2006 660131 12369.34 1.87

2007 748251 13824.08 1.85

2008 929387 19433.27 2.09

2009 715782 17898.83 2.50

Source: Author's calculation using UNCOMTRADE database, United Nations Statistical

Division

An analytical study of share of India’s Exports in ASEAN Imports reveals that share of India in

ASEAN Imports has ranged from 0.39 percent to 2.5 percent over the study period. Overall, the

share trend is rising except in the years 1984-1986 and 1998. Due to Asian financial crisis, India

exports share showed a decline in 1998, but after that it has risen sharply and touched a high of 2.5

percent even in the period of world recession. The increase in India’s Exports to the region is a

clear indication of the inherent potential and the need to further examine the gains made in

building the economic relationship between the two. It should be noted that India did not emerge

on the global landscape until it began to seriously engage with ASEAN and the other East Asian

countries, for which the India-ASEAN summits provided a most useful opportunity. India-ASEAN

engagements at the summit level and all the subsequent developments have helped India to

become a credible interlocutor with the major powers of the world.


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TABLE-II

SHARE OF INDIA’S IMPORTS IN ASEAN EXPORTS: 1980-2009

Years ASEAN

Imports(m$)

India’s Exports to

ASEAN(m$)

Share of India in ASEAN Imports

(in %)

1980 71038 438.67 0.62

1981 71786 450.05 0.63

1982 69488 635.95 0.92

1983 71842 821.87 1.14

1984 78482 1024.58 1.31

1985 71789 747.68 1.04

1986 66609 779.94 1.17

1987 83020 1019.98 1.23

1988 104379 1147.41 1.10

1989 121523 985.39 0.81

1990 141310 1168.32 0.83

1991 162383 849.77 0.52

1992 182796 949.31 0.52

1993 208587 844.77 0.40

1994 256546 1696.33 0.66

1995 311344 2416.45 0.78

1996 329355 2755.34 0.84

1997 352510 3390.31 0.96

1998 326750 4318.73 1.32

1999 352857 5082.34 1.44

2000 420925 4299.39 1.02

2001 383178 4345.49 1.13

2002 401901 4807.28 1.20

2003 468693 6686.88 1.43

2004 567131 8549.99 1.51

2005 640746 10632.02 1.66

2006 758728 16300.61 2.15

2007 841955 21031.03 2.50

2008 966068 26698.44 2.76

2009 791563 23968.10 3.03


Division

Table II presents merchandise Imports of India from ASEAN and its relative share in ASEAN’s

Exports. It is observed from the table that India’s share in ASEAN Exports is showing

significantly a rising trend and it is also important to note that in 1997, exports share has shown a

decline but imports share does not affected by it. Imports share of India is rapidly rising after 1994

and it ranges from 0.69 percent to 3.03 percent during the study period. As ASEAN’s economic

significance has been representing an impressive increase, similarly India’s sustained economic

growth has attracted ASEAN to foster economic ties with it. India’s natural environment, nature of

industries, expertise, demands and supply conditions have made positive environment for ASEAN.

Therefore, India’s merchandise Imports have shown rising trend.


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TABLE-III

GROWTH OF INDIA’S EXPORTS AND IMPORTS WITH ASEAN: 1980-2009

t* - significant at 5% level of significance

F*- significant at 5% level of significance


Division

The growth of bilateral trade of India and ASEAN has been shown in the Table- III. The table

shows that growth of India’s Exports to ASEAN is 41.9 percent during the study period which

shows high growth potential for Indo-ASEAN trade. Similarly, it is also observed that in sub-

period 1995-2009 growth of Exports and Imports is very high i.e. approximately 49 percent.

During this period, WTO was established to provide institutional framework for trade in goods and

services between countries. Most of the countries have liberalized their trade multilaterally,

regionally or bilaterally. Another stepping stone between India and ASEAN has been placed at

second ASEAN- India summit held in October, 2003 i.e. signing of FTA between these two

regions. In this agreement, India committed to design its peak tariffs and India has upgraded its

trade relations with each country of ASEAN. However, in the first sub-period (1980-1994) growth

Variable

name

Time period b0 b1 CAGR R2 F-value

India’s

Exports to

ASEAN

1980-1994 4.979 0.156

(8.361)*

43.21 0.84 69.90*

1995-2009 7.180 0.173

(9.416)*

48.93 0.87 88.67*

1980-2009 4.946 0.158

(24.722)*

41.90 0.96 611.18*

India’s

Imports from

ASEAN

1980-1994 6.274 0.0596

(4.232)*

14.70 0.58 17.91*

1995-2009 7.493 0.172

(13.023)*

48.59 0.93 169.59*

1980-2009 5.606 0.146

(13.754)*

39.95 0.87 189.17*


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of India Imports from ASEAN is comparatively very low (14.7 percent) than growth of India’s

Exports (43.2 percent) to ASEAN. The values including t-statistics, ANOVA (F-value) and

coefficient of determination (R2) for India’s Exports and Imports confirm that the growth rate is

statistically significant. On the whole, Exports growth is higher than Imports growth over the

period.

After analyzing India’s share and growth with ASEAN trade, it is essential to examine ASEAN

share in total Exports and Imports of India. The table depicts the ASEAN share in India’s total

Exports and Imports for the period 1980-2009:

TABLE-IV

SHARE OF ASEAN IN INDIA’S TOTAL EXPORTS: 1980-2009

Years India’s Exports to World

India’s Exports to ASEAN(m$)

Share of ASEAN in India’s Exports (in %)

1980 7529.14 251.79 3.34

1981 7879.21 298.05 3.78

1982 8484.76 293.77 3.46

1983 9456.57 268.93 2.84

1984 9859.98 242.76 2.46

1985 8988.71 213.60 2.38

1986 9779.72 309.65 3.17

1987 12088.30 379.90 3.14

1988 13872.44 400.19 2.88

1989 17045.03 678.58 3.98

1990 17940.18 905.54 5.05

1991 17899.89 1003.24 5.60

1992 20711.29 1369.34 6.61

1993 22236.92 1650.01 7.42

1994 26330.01 1842.97 7.00

1995 31698.57 2697.69 8.51

1996 33468.59 2855.09 8.53

1997 34793.75 2462.37 7.08

1998 33207.32 1623.84 4.89

1999 36671.91 2227.00 6.07

2000 42358.10 2660.83 6.28

2001 43878.49 3315.11 7.56

2002 50097.96 4503.30 8.99

2003 59360.66 5071.80 8.54

2004 75904.20 7552.22 9.95

2005 100352.64 10285.77 10.25

2006 121200.61 12369.34 10.21

2007 145898.05 13824.08 9.48

2008 181860.90 19433.27 10.69

2009 176765.04 17898.83 10.13


Division


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TABLE-V

SHARE OF ASEAN IN INDIA’S TOTAL IMPORTS: 1980-2009

Years India’s Total

Imports(m$)

India’s Imports from

ASEAN(m$)

Share of ASEAN in India’s

Imports (in %)

1980 13818.70 438.67 3.17

1981 14456.93 450.05 3.11

1982 14137.82 635.95 4.50

1983 15284.15 821.87 5.38

1984 14411.57 1024.58 7.11

1985 16223.68 747.68 4.61

1986 15721.73 779.94 4.96

1987 17153.82 1019.98 5.95

1988 19350.90 1147.41 5.93

1989 21718.19 985.39 4.54

1990 23799.15 1168.32 4.91

1991 19509.42 849.77 4.36

1992 24452.41 949.31 3.88

1993 23304.07 844.32 3.62

1994 28654.74 1696.33 5.92

1995 36592.06 2416.45 6.60

1996 39112.81 2755.34 7.04

1997 41429.43 3390.31 8.18

1998 42424.95 4318.73 10.18

1999 49713.48 5082.34 10.22

2000 52940.25 4299.39 8.12

2001 50671.11 4345.49 8.58

2002 57453.47 4807.28 8.37

2003 72430.52 6686.88 9.23

2004 98981.13 8549.99 8.64

2005 140861.67 10632.02 7.55

2006 178212.44 16300.61 9.15

2007 218645.29 21031.03 9.62

2008 315712.11 26698.44 8.46

2009 266401.55 23968.10 9.00


Division


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The table IV & V show that the share of ASEAN in India's total Exports has increased significantly

from 3.34 percent in 1980 to 10.13 per cent in 2009.However, it shows an uneven trend. It has

marginally declined in the years 1983-1985, 1988, 1998 and 2007 and touched the low of 2.38

percent in 1985.The demarcations of the study period into two sub-periods reveals that in the first

sub-period by following fluctuating trend, the share of ASEAN has almost doubled from 3.34

percent in 1980 to 7 percent in 1994.During the second sub-period it has touched the peak of 10.69

percent in 2008. Similarly by analyzing ASEAN share in India’s total Imports, it is clear from table

that ASEAN share has ranged from 3.11 percent to 10.22 percent by registering almost three times

increase during the period under study. Mandal (2009) study highlights that India has penetrated

ASEAN markets to a greater extent than ASEAN has been able to do for Indian markets. One reason

for this might be the fact that India is more protectionist than ASEAN and India’s degree of

openness is growing more rapidly. Therefore, it can be said that ASEAN as a region has attained a

status of significant trade partner of India during the study period.

India’s Trade with the member Countries of ASEAN: 1980-2009:

An analysis of India’s trade with ASEAN member nations is important as this kind of analysis will

enable us to understand the relative significance of member countries of ASEAN in India’s trade

and explore the possibilities of future growth. Therefore, in the present section, share and growth

of India’s trade with ASEAN member countries has been analyzed individually. In 1967, ASEAN

was established by the five original Member Countries, namely, Indonesia, Malaysia, Philippines,

Singapore, and Thailand. Brunei Darussalam joined on 8 January 1984, Vietnam on 28 July 1995,

Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999. As the present study

has been confined from 1980 to 2009 period, so trade of each country of ASEAN has been

analyzed when it had joined ASEAN. To explore growth of Indo-ASEAN trade, initially six

countries trade has been taken into consideration. After the joining of Vietnam in 1995, ASEAN -7

and in 1997, ASEAN has become ASEAN 9 and now ASEAN has ten member nations. Therefore,

from 1999, India’s trade with ASEAN-10 has been analyzed. The following table analyzes the

share of every country in India exports and imports.


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TABLE VI : DIRECTION OF INDIA’S EXPORTS TO ASEAN:1980-2009

Years Brunei

(1)

Indonesia

(2)

Malaysia

(3)

Philippines

(4)

Singapore

(5)

Thailand

(6)

Vietnam

(7)

Myanmar

(8)

Lao

PDR

(9)

Cambodia

(10)

1980 0.01 17.85 23.63 2.97 38.83 16.72 - - - -

1981 0.03 25.56 17.48 1.86 40.08 14.99 - - - -

1982 0.00 27.03 18.54 3.03 42.26 9.14 - - - -

1983 0.02 12.14 22.29 2.37 46.85 16.32 - - - -

1984 0.15 11.51 26.53 2.49 49.68 9.65 - - - -

1985 0.04 5.74 27.54 1.90 54.65 10.13 - - - -

1986 0.04 5.84 21.48 1.79 54.75 16.10 - - - -

1987 0.10 5.45 18.31 4.10 55.40 16.65 - - - -

1988 0.50 7.67 22.55 6.20 55.23 7.85 - - - -

1989 0.08 8.90 15.99 3.92 42.35 28.76 - - - -

1990 0.07 11.94 16.49 3.10 41.42 26.98 - - - -

1991 0.06 14.65 20.21 6.42 38.83 19.83 - - - -

1992 0.04 11.30 15.49 4.46 48.02 20.69 - - - -

1993 0.03 14.24 14.99 3.53 45.57 21.65 - - - -

1994 0.13 15.07 15.55 5.40 41.79 22.06 - - - -

1995 0.27 24.48 14.53 5.33 33.32 17.48 4.60 - - -

1996 0.21 20.73 18.60 6.43 34.23 15.66 4.14 - - -

1997 0.09 17.76 19.90 9.70 31.46 13.93 5.14 2.00 0.01 -

1998 0.20 11.42 19.80 7.31 31.86 19.76 7.72 1.85 0.08 -

1999 0.00 14.49 20.04 6.44 30.00 20.16 6.93 1.53 0.06 0.35

2000 0.11 14.67 19.95 6.55 29.58 19.74 7.34 1.62 0.13 0.30

2001 0.07 14.38 23.77 6.99 27.93 18.05 6.57 1.74 0.17 0.32

2002 0.10 17.09 16.49 10.38 30.65 16.46 6.76 1.64 0.04 0.38

2003 0.10 20.50 15.64 6.39 33.56 14.43 7.47 1.51 0.01 0.40

2004 0.07 15.96 13.77 4.81 45.24 11.35 7.08 1.49 0.01 0.22

2005 0.04 13.51 11.12 4.69 52.77 10.30 6.16 1.14 0.06 0.21

2006 0.36 15.12 10.76 4.83 49.54 10.92 7.07 1.00 0.02 0.39

2007 0.06 13.59 13.38 4.13 46.22 12.10 8.98 1.18 0.02 0.32

2008 0.09 13.68 15.61 3.89 45.56 10.32 9.33 1.22 0.02 0.28

2009 0.14 16.78 19.69 3.90 38.15 9.56 10.24 1.16 0.15 0.23

Source: Author's calculation using UNCOMTRADE database, United Nations Statistical Division


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Table VI outlines the share of individual member countries of ASEAN in India’s Exports to

ASEAN for the period under study. It is clear that since 1980, India’s major Export destinations

have been Singapore, Malaysia, Indonesia and Thailand. In 1980, the share of these four

countries in total Exports of India to ASEAN was 97.07 percent registered a significant decline

and become 84.18 percent in 2009. However, there have been many fluctuations in the

intermittent years with.

Singapore’s share has significantly increased to 55 percent from 1985 -1988 and has registered

double decline and settled at 27.93 percent in 2001. After that the share of Singapore has

continuously shown rising trend except 2009 due to global economic meltdown. This structural

change in the pattern of Singapore’s total trade since 2001 could well be attributed to its open and

liberal attitude during the post- 2001 period. This change in attitude is clearly evident from the fact

that all its trade agreements have entered into force only after 2001. Thus, Singapore is the largest

market for Indian Exports within ASEAN. Presently, Singapore absorbs almost half of India’s total

Exports to ASEAN.

Malaysia is India’s second most important trading partner amongst the ASEAN countries.

Although, the share of Malaysia has marginally fallen from 23.63 percent to 19.69 percent during

the study period, yet it has emerged as India’s second largest trading partner in the ASEAN after

Singapore. Spectacular progress of the Malaysian economy since the late eighties, the new self-

confidence of Malaysian entrepreneurs, and the liberalization of the Indian economy since 1991

have triggered new dimensions in bilateral commercial and economic relations. India and Malaysia

are now mutually important economic partners.

Similarly in case of Indonesia, share has hovered around 17 percent to 18 percent. In 1980, the

share of Indonesia in India exports was 17.85 percent and 16.78 percent in 2009.As a member of

ASEAN, Indonesia has emerged as a third largest Export market for India.

Thailand’s share has varied from 7.85 percent to 28.76 percent. Further, its share has declined

secularly after 2000 and come down to 9.56 percent. Though many bilateral visits have been taken

place during this period and even FTA initiative with Thailand was started in 1997 and took its

real shape in 2001, yet share of Thailand’s in India’s Exports has declined could be attributed to

FTA which generally offer greater scope for enhancing exports but India-Thai FTA has more

political significance rather than economic. Besides this, Thailand economy faced strong

competition from China, Indonesia and Vietnam where cheap labour was available. It reduces the

competitiveness of Thailand’s labour intensive industries.

Declined share of Malaysia and Thailand has compensated by increment in the share of other

ASEAN countries particularly Vietnam. In case of Vietnam, the share in India’s Exports to

ASEAN has significantly increased from 4.6 percent in 1995 to 10.24 percent in 2009. Now,

Vietnam becomes a rising star for Indian Export market. Therefore, to some extent, India has

diversified its destination of Exports to ASEAN overtime.

Other countries which join ASEAN in 1997, 1999 like Lao PDR, Myanmar and Cambodia

constitute only less than 2 percent share of India’s total exports. Relatively lower demand, lack of

contact between various business organizations and higher shipping costs may be the reasons for

comparatively lower share of these countries in India’s Exports.


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TABLE VII : DIRECTION OF INDIA’S IMPORTS FROM ASEAN: 1980-2009

Years Brunei

(1)

Indonesia

(2)

Malaysia

(3)

Philippines

(4)

Singapore

(5)

Thailand

(6)

Vietnam

(7)

Myanmar

(8)

Lao PDR

(9)

Cambodia

(10)

1980 0.00 4.74 72.22 2.25 16.78 4.02 0.00 0.00 0.00 0.00

1981 0.00 4.61 56.87 2.25 32.22 4.05 0.00 0.00 0.00 0.00

1982 0.00 3.42 45.62 1.18 41.22 8.56 0.00 0.00 0.00 0.00

1983 0.00 2.77 39.46 0.59 46.15 11.03 0.00 0.00 0.00 0.00

1984 0.05 4.44 44.31 1.07 43.13 7.00 0.00 0.00 0.00 0.00

1985 0.00 6.31 45.00 1.14 37.77 9.78 0.00 0.00 0.00 0.00

1986 0.00 9.64 56.02 0.42 27.58 6.34 0.00 0.00 0.00 0.00

1987 0.00 5.19 63.57 0.22 26.12 4.90 0.00 0.00 0.00 0.00

1988 0.02 5.45 47.37 0.15 31.41 15.60 0.00 0.00 0.00 0.00

1989 0.00 5.61 40.59 1.00 46.53 6.27 0.00 0.00 0.00 0.00

1990 0.00 6.87 45.27 0.38 42.02 5.46 0.00 0.00 0.00 0.00

1991 0.01 7.91 46.02 3.70 36.61 5.74 0.00 0.00 0.00 0.00

1992 0.00 7.06 46.30 1.15 38.63 6.86 0.00 0.00 0.00 0.00

1993 0.00 14.17 29.38 0.70 48.97 6.77 0.00 0.00 0.00 0.00

1994 0.01 18.66 28.80 0.69 41.72 10.12 0.00 0.00 0.00 0.00

1995 0.00 19.04 37.11 0.89 35.31 7.01 0.64 0.00 0.00 0.00

1996 0.00 21.66 40.02 0.60 30.51 7.15 0.06 0.00 0.00 0.00

1997 0.00 21.55 34.73 0.68 29.51 6.67 0.26 6.60 0.00 0.00

1998 0.00 19.21 37.28 0.86 32.08 6.33 0.21 4.03 0.00 0.00

1999 0.00 18.86 39.81 1.11 30.18 6.45 0.23 3.37 0.00 0.00

2000 0.00 22.93 30.49 1.59 32.60 7.89 0.31 4.15 0.00 0.03

2001 0.01 22.25 26.52 1.79 31.18 9.77 0.40 8.06 0.00 0.03

2002 0.01 26.28 27.68 2.76 27.74 7.59 0.58 7.34 0.00 0.01

2003 0.01 28.11 28.33 1.67 27.92 8.06 0.50 5.39 0.00 0.00

2004 0.01 28.39 25.90 2.12 29.15 8.77 0.86 4.80 0.00 0.00

2005 0.01 28.39 22.91 1.91 29.72 11.25 1.20 4.60 0.00 0.00

2006 1.38 22.15 28.56 1.28 31.81 9.51 0.98 4.31 0.00 0.01

2007 1.11 23.02 27.22 0.83 32.82 10.42 0.73 3.85 0.00 0.01

2008 1.22 24.09 27.95 0.85 31.11 9.98 1.39 3.39 0.00 0.02

2009 2.04 31.71 20.82 1.43 25.62 11.58 1.85 4.93 0.00 0.02

Source: Author's calculation using UNCOMTRADE database, United Nations Statistical Division


93

During the period 1980-2009, the relative importance of ASEAN’s countries in India’s Imports has

changed considerably (Table VII). In the 1980, Malaysia’s share was 72.22 percent and 89 percent

imports of India come from only two countries of ASEAN i.e. Malaysia and Singapore. At the end of

this sub-period, Malaysia’s share dropped to only 29 percent. Correspondingly, Singapore’s share

increased from 17 percent to 42 percent; and Indonesia from 5 percent to 19 percent. In the second

sub-period, initially Indonesia’s share was the highest i.e. 37 percent, but in 2009 it comes down to

21 percent; whereas Malaysia’s share increased from 19 percent to 31 percent. But Singapore’s share

declined from 42 percent to 26 percent. Overall, it is observed that in the year 2009, India’s major

Import destinations in ASEAN region are Indonesia, Singapore, Malaysia, and Thailand. Other

countries of ASEAN like Myanmar, Philippines Brunei, Vietnam, and Cambodia only comprise 10

percent share of India’s Imports.

TABLE: VIII : GROWTH OF INDIA’S TRADE WITH ASEAN COUNTRIES(1980-2009)

Sr.No. Country Time Period CAGR of

Exports (%)

CAGR of

Imports (%)

1. Indonesia 1980-1994 35.20 40.60

1995-2009 43.21 57.39

1980-2009 47.57 64.05

. Malaysia 1980-1994 34.58 5.66

1995-2009 41.90 36.45

1980-2009 39.31 27.05

3. Singapore 1980-1994 43.54 22.63

1995-2009 60.69 46.21

1980-2009 41.57 34.58

4. Philippines 1980-1994 43.54 22.63

1995-2009 60.69 46.21

1980-2009 41.57 34.58

5. Thailand 1980-1994 59.95 19.61

1995-2009 33.65 62.55

1980-2009 41.90 41.57

6 Brunei 1980-1994 91.42 110.68

1995-2009 92.75 468.85

1980-2009 52.75 256.45

7 Vietnam 1980-1994 - -

1995-2009 65.19 114.78

1980-2009 930.38 716.58

8 Myanmar 1980-1994 - -

1995-2009 801.57 959.25

1980-2009 696.15 870.50

9 Lao PDR 1980-1994 - -

1995-2009 381.94 1016.86

1980-2009 444.50 202.69

10. Cambodia 1980-1994 - -

1995-2009 2446.83 1309.28

1980-2009 523.73 341.57 Source: Author's calculation using UNCOMTRADE database, United Nations Statistical Division

IRJC International Journal of Social Science & Interdisciplinary Research__________________________________ ISSN 2277 3630 Vol.2 (2), FEBRUARY (2013) Online available at indianresearchjournals.com

94

Table VIII reveals that seven out of ten countries have high exports growth during the whole

study period. Malaysia, Singapore, Philippines, Thailand, Vietnam, Lao PDR, Cambodia have high

exports potential whereas Brunei, Indonesia, Myanmar have more Imports potential. CAGR of

new joining countries is very high as it depicts that CLMV countries potential is still untapped and

there is lot of scope for future trade of India with these countries of ASEAN.

CONCLUSION:

An aggregate analysis of Indo-ASEAN trade exhibits the importance of ASEAN in India’s trade. It

is observed that ASEAN’s importance has been increasing since 1980. ASEAN as a region has

displayed great dynamism. It is a noticeable fact that in comparison to ASEAN exports, India’s

exports have become 70 times in 2009 compared to 1980. This indicates that with India’s sustained

economic growth and increased unilateral liberalization, there is a large untapped potential for

expansion of ASEAN-India merchandise trade from the present levels.

By analyzing the share of each country of ASEAN in India Exports and Imports, it is concluded that

four countries of ASEAN namely Singapore, Malaysia, Indonesia and Thailand constitute more than

80 percent share of India’s Exports and major Import destinations of India are Indonesia, Singapore,

Malaysia and Thailand. Thus, the direction of India’s trade in ASEAN region has been changing

overtime. These results are confirmed by Exports and Imports growth of India with each country of

ASEAN. The empirical analysis of growth of trade of ASEAN countries shows that after 1995,

Vietnam has also emerged as significant trade partner of India in ASEAN region. The growth of

Exports and imports of Cambodia, Lao and Myanmar also confirm that ASEAN on the whole has

great trade potential and Indo-ASEAN trade has a lot of scope for future.

REFERENCES

ASEAN Secretariat (2006), “Studies unit Brief”, Paper No. 9.

ASEAN Secretariat (2006), “Studies unit Brief”, Paper No. 10.

ASEAN Secretariat (2009), “Road Map for an ASEAN community (2009-2015), Jakarta.

ASEAN Web (2010), “ASEAN-India Dialogue Relations”.

Asian Development Bank (2008), “Emerging Asian Regionalism”, Manila.

Batra Amita (2006): “Asian Economic Integration ASEAN+3+1 or ASEAN+1s” ,ICIER working

paper no.186, pg-11.

Gaur, Seema (2003): “ASEAN-India Ties Entering a New Phase”, Business Times, October 8,

2003.

Ghate, J.P. and Parkash Satya (1993) : “India and ASEAN trade and Economic cooperation : a

perspective”. India and ASEAN: Partners in progress, MVIRDC World Trade Centre,

BOMBAY.

Nambiar Shankaran (2004) : “ India Engagement with ASEAN: Beyond Trade in Goods”, ISAS

working paper no.129, 26 August, 2004.

Prashanth Parameswaran (2010), “Strengthening ASEAN-India Relations in the 21st Century” The

project 2049 institute.

Tai Hui (2010), “ASEAN Discovers India”, Wall Street Journal.

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INDIA AND ASEAN TRADE: AN OVERVIEW

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