India-ASEAN Free Trade Agreement: An ex post evaluation

Ex post effects of the India-ASEAN Free Trade Agreement reveal that India's balance of trade with ASEAN has deteriorated and there is a weak correspondence between tariff reforms and trade expansion. The aggregate value of the net surplus with the government after taxing gainers and subsidizing losers was positive up to 2012 but has been declining ever since and became negative 2013 as trade with the rest of the world has fallen for both India as well as ASEAN owing to the global slowdown. We show that had the slowdown not been there the surplus would always have been positive for India. We also propose two alternative policy scenarios where the surplus would always have been positive: an FTA with rest of the world and a schedule where tariff elastic goods were given priority.