A Review of ASEAN-India Free Trade Agreement After a Decade: Evidence from Structural Gravity Model Estimates

Amidst the ongoing review of ASEAN-India Free Trade Agreement (AIFTA), this study empirically reassesses the impact of AIFTA on trade between India and ASEAN nations. Employing a structural gravity model with three-way fixed effects and accounting for intranational trade flows, the analysis addresses biases in earlier estimates and highlights overlooked dynamics. By controlling for intranational trade, the study corrects the upward bias in earlier estimates of AIFTA's bilateral trade effects and uncovers significant unilateral effects. Findings demonstrate that AIFTA significantly benefits both members and nonmembers. Furthermore, it uncovers differential impacts of AIFTA on India's exports and imports across ASEAN members.