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Any country including India which has registered remarkable growth has done so by participating in the economic integration process led by global and regional trade liberalization. India has an emerging web of cooperation with East Asian countries, especially Association of South East Asian Nations (ASEAN) through the ASEAN–India dialogue process, the bilateral free trade agreement with Malaysia, Singapore, and Thailand and subregional initiatives such as the Mekong–Ganga Cooperation and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC; Yong 2005).

India's free trade agreements and regional trade agreements with countries in this region have not been models of success in their implementation even when there were benefits. The main idea of the formal trade negotiation was to enhance ASEAN-India partnership, specifically in the economic arena. However, India's position in ASEAN's external trade and investment flows has not yet experienced any special momentum. The two-way trade between India and ASEAN is tilted toward ASEAN with the trade gap expanding rapidly.

Thus, to understand India's trade with ASEAN, the chapter would examine India's trade prospects with the ASEAN-5 (Indonesia, Malaysia, Thailand, Philippines, and Vietnam) particularly in merchandise trade. This chapter would identify new products that India can export to the ASEAN, which will increase its share in ASEAN's market. In order to achieve this, the chapter seeks to discuss the detailed microanalysis at HS 6-digit level to capture the trade creation effects based on lower unit value items for estimating product-specific potential exports and imports to/from ASEAN.

International trade is a long-standing issue for the development of any country. In the traditional theory of trade exports or trade pattern arises because of supply side differences between countries such as technological or factor endowment differences. Such theories predict inter-industry trade but not intra-industry trade (IIT). But in contrary, the simultaneous export and import of products of the same sector was led after the industrialization of developed countries from the 1960s onwards, which was described as “IIT” by [Balassa, B. (1986). Oxford Economic Papers, 38, 220–233]. In this study, India's bilateral IIT with major Asian trading partners was analyzed and the trends in IIT level for horizontal and vertical IIT were observed separately, along with gravity model for the year 2009–2018. This study examined the geographic component in knowledge flows, which could be found at the international level and whether or not an exchange of knowledge is related to foreign trade, particularly IIT. To measure the IIT level for investigating trade patterns between India and member countries of major Asian trading partners, IIT index will be used, known as Grubel-Lloyd index.