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The Economic Potential of an India-US Free Trade Agreement

Author

Listed:
  • Fukase, Emiko

    (World Bank)

  • Martin, Will

    (International Food Policy Research Institute)

Abstract

This paper explores the economic implication of a potential free trade agreement between India and the United States. The overall impacts are likely to be positive for the United States and India. While gains from trade creation would be offset by trade diversion on the import side, both countries would gain from improved access on the export side. The United States is likely to gain largely through terms of trade improvements for its goods and services, as initial protection in India remains relatively high. India would experience an expansion of exports and output, particularly in textiles and apparel. The paper explores how the effects of an India-United States free trade agreement might be affected by prior free trade agreements. Adding an India-United States free trade agreement to prior agreements would tend to bring additional welfare benefits to both countries. India would also gain substantially if it concluded a free trade agreement with the United States and then extended it to other partners. The results suggest that an India-United States free trade agreement might become a building block toward more liberal trade regimes.

Suggested Citation

  • Fukase, Emiko & Martin, Will, 2016. "The Economic Potential of an India-US Free Trade Agreement," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 31(4), pages 774-816.
    • Handle: RePEc:ris:integr:0699
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    Citations

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    Cited by:

    1. Debashis Chakraborty & Biswajit Nag & Ripudaman Bhardwaj, 2021. "The Proposed India-EU Trade Agreement and UNECE 1958 Provisions: Empirical Results for Indian Automobile Sector," Working Papers 2151, Indian Institute of Foreign Trade.
    2. Biswajit Nag & Debashis Chakraborty & Author-Name: Sakshi Aggarwal, 2021. "India’s Act East Policy: RCEP Negotiations and Beyond," Working Papers 2101, Indian Institute of Foreign Trade.
    3. Biswajit Nag & Debashis Chakraborty & Sakshi Aggarwal, 2021. "India’s Act East Policy: RCEP Negotiations and beyond," Working Papers 2150, Indian Institute of Foreign Trade.
    4. Arjun SINGH & Dr. S.P. PADHI, 2020. "India and trade blocs: A gravity model analysis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(625), W), pages 217-232, Winter.

    More about this item

    Keywords

    Free Trade Agreement; India; United States; CGE;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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