27:T55a,

The article is concerned with the relationship between foreign direct investment (FDI) flows and exports and asks if these two flows are substitutes or complement each other. Empirical work in this area employing industry- or country-level data has generally found a positive or complementary relationship between exports and FDI. Our empirical strategy is different in that we try to throw some light on the issue of substitution versus complementarity between FDI and exports by carrying out econometric analyses directed at assessing how India’s mass termination of bilateral investment treaties (BITs) in March 2017 and such BIT terminations during September–December 2016 and April 2017 to December 2018 impacted India’s FDI inflows and imports. Our finding of a significant negative effect of BIT termination on FDI inflows, corroborating the findings of two earlier studies and the finding of a significant positive impact of BIT termination of India’s imports is conceivably reconcilable only if there is a substitution relationship between FDI and exports. Hence, we find some empirical evidence of a substitution relationship between FDI and exports—at least, this has been the relationship between India’s inflow of FDI and the inflow of goods as imports, if not valid for other countries.

JEL codes: C31, C33, K33, F21

28:T4f8,

Both India and ASEAN are characterised by dynamic market economies and have implemented extensive reforms to deepen their economic integration. Despite the existing economic links between them, this article acknowledges that the trade relations are significant but fall short of their full potential. In this context, the present study utilises a modified trade creation approach to estimate India’s export potential at the sectoral level with individual ASEAN member states for the years 2010 and 2021. The analysis has identified five most significant trading partners in the region, namely, Singapore, Thailand, Malaysia, Vietnam, Indonesia, which together represent substantial trading opportunities in the five broad sectors such as Machinery, Chemical products, Base metals, Plastics, Minerals. Additionally, this article explores ASEAN’s GVC linkages with India vis-à-vis world at an aggregate and sectoral level over the last decade. We base our analysis on the P&C using the UN Broad Economic Category (BEC) product classification, concorded with HS trade classification. The findings reveal a marginal decline in the region’s share of GVC trade with India relative to its global GVC trade.

JEL Classification: F10, F14, F15