India's Rise: The Need for Bilateral Trade within Asia

It was a sunny day in New Delhi when Mr. and Mrs. Sharma went shopping for their daughter's wedding. They found a beautiful silk saree that was perfect for the occasion, but when they asked about its origin, the shopkeeper replied cunningly, "It's imported from China, where the silk industry is flourishing." Mr. Sharma was taken aback; he realized that Indian silk producers were losing out on their own market. The story of Mr. Sharma is a reflection of the current state of trade in Asia, where India has a lot of catching up to do.

Asia is the world's largest and most populous continent, with a total population of over 4.6 billion. It is home to some of the world's fastest-growing economies, including China, Japan, and South Korea. However, India's share of trade within Asia has remained limited, and this calls for a shift towards bilateral trade within Asia. As the world's largest democracy and one of the fastest-growing economies in the world, India has enormous potential to increase trade with its neighbors.

Quantifiable Examples

The share of India's bilateral trade with other Asian countries has increased from 57.88% in 2011-12 to 59.08% in 2017-18, showing a small increase but still falling short of expectations. The major imports from Asia are petroleum, gold, and other precious metals. On the other hand, the major exports to Asian countries are automobile components, engineering goods, and pharmaceuticals. India's total trade with ASEAN stands at $100 billion, with the aim of reaching $200 billion by 2022. India's trade with China stood at $92.89 billion during 2019-20, with a deficit of $56.95 billion. These figures highlight the potential for India to further expand its trade within Asia.

: India's Rise: The Need for Bilateral Trade within Asia

India's ascension to becoming a world economic power can be greatly boosted if it focuses on bilateral trade with its Asian neighbors, especially in light of global changes regarding the pandemic and trade relations.

Conclusions in Three Points

1) India's trade with Asia has enormous potential for growth, and this requires a focus on bilateral trade agreements. While India's trade with China is in a deficit, other countries like Japan, South Korea, and ASEAN countries offer promising investment opportunities.

2) The rise of economies in Asia presents India with a tremendous opportunity to not only engage with them economically but also on geopolitical and security fronts. Strengthening relationships with existing major economies and new digital economies can generate more significant returns for both sides.

3) The regional importance of Asia cannot be overstated. Given the scale, growth, and emerging markets across diverse sectors, it is critical that India expands its influence by focusing on increasing bilateral trade relations.

and Case Studies

An example is Bangladesh, which has emerged as an important trade partner for India, with two-way bilateral trade valued at $9.4 billion in (2018-19), making it India's 9th largest trading partner globally. The informal trade between India and Bangladesh is even higher, ranging from $6 to $9 billion, which is indicative of the high demand for Indian goods. Personal anecdotes like Mr. Sharma's, who discovered that imported items were overtaking domestic products, can be seen in various sectors of the Indian economy that are losing significance in the wake of global presence.

Practical Tips

India needs to review its domestic trade policies and implement reforms to facilitate trade, allowing greater ease of doing business in Asia. International agreements should be simplified to reduce transactional costs. This can be done by easing tariffs and other trade barriers to give Indian manufacturers access to a broader market. Focused investment in specific sectors like manufacturing or digital economy can help India dominate and lead markets across Asia.

References and Hashtags

Url references:

1. https://www.rediff.com/money/report/silk-grows-in-china-pushes-india-out/20140820.htm

2. https://indianexpress.com/article/business/economy/india-china-trade-deficit-widens-to-56-95-billion-in-2019-20-6470307/

3. https://www.businesstoday.in/current/economy-politics/india-asean-trade-bilateral-corridor-infra-vikas-project-to-be-launched-soon/story/427375.html

Hashtags: TradeWithinAsia, India'sRise, BilateralTrade, AsianMarkets, DomesticReforms, RegionalInfluence

Article Category: Business and Economics