ASEAN3+India Trade Relations

World leaders at the First East Asia Summit in Kuala Lumpur in 2005 endorsed high-level studies and dialogues on an enlarged ASEAN free trade agreement to promote regional cooperation for mutual economic and political benefits between the ASEAN and the world's other trading blocs. The endorsement is consistent with India's contemporary reforms, with its ‘Look East’ policy and economic diplomacy. In spite of this important development, only limited research has been carried out or reported for informed discussions and policy analysis in the particular case of ASEAN3+India. This paper is a substantive evidence-based study of India's reforms, ‘Look East’ policy, economic diplomacy, and East Asia Summit trade and cooperation issues. It uses the recently developed award-winning generalised gravity theory (see Tran Van Hoa 2004) to construct an ASEAN3+India model of growth and endogenous trade. Using historical data from the Organisation for Economic Cooperation and Development (OECD), Reserve Bank of India and Japan's ICSEAD, the paper provides substantive findings on the causal impact of ASEAN3+India trade in goods, FDI and services, and post-1991 reforms on economic growth for more credible policy analysis in the sense of Kydland (2006). Implications of the findings for India's engagement with Asia are also discussed.