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Journal of Economic Integration 2020 March;35(1) :91-110.
DOI: https://doi.org/10.11130/jei.2020.35.1.91
South Asia’s Economic Integration with East Asia: An Exploratory Analysis with a Focus on India
Venkatachalam Anbumozhi and 1
Kaliappa Kalirajan 2
1Economic Research Institute for ASEAN and East Asia, Indonesia
2The Australian National University, Australia
Corresponding Author: Venkatachalam Anbumozhi ,Tel: +628119106874, Email: v.anbumozhi@eria.org
Copyright ©2020 Journal of Economic Integration
ABSTRACT
Economic integration of South Asia and East Asia has been growing steadily since the 1990s, fuelled by domestic reforms and the emergence of regional supply chains. Within South Asia, India emerged as the largest trading partner and investment destination for East Asian economies. With its new Act East Policy, India has been proactively looking at free trade agreements with Association of Southeast Asian Nation and East Asia, which has brought benefits to South Asia in terms of improved trade and increased investment. This paper assesses the experience of the economic integration of South Asia and East Asia by addressing questions such as the extent of trade integration achieved and impediments to deepening integration. It found that trade and investment linkages are growing as well as casually related. However, attaining the full potential of economic integration is constrained by the insufficient depth in the use of existing trade agreements, barriers to service trade, and poor infrastructure connectivity. Expansion of Regional Comprehensive Economic Cooperation would significantly enhance economic integration of South Asia, particularly India, and East Asia.

JEL Classification
F15: Economic Integration
F16: Trade and Labor Market Interactions
F13: Trade Policy; International Trade Organizations
Keywords: Economic Integration | Infrastructure | Free Trade Agreements | Foreign Direct Investment | Regional Cooperation
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