In the recent years, developing countries have increasingly emerged as regional and global growth engines, reflecting high growth in economic activity and trade. The growing importance of the South, as these countries are commonly referred to, can be gauged by the increasing share of emerging markets and developing economies in global GDP, from 21% in 2001 to 58% in 2016. In fact, according to the International Monetary Fund, global recovery in the next 5 years is to be primarily driven by growth in emerging market economies, which is projected at an annual average growth rate of 4.8%. The share of emerging market economies in global GDP is expected to increase.
The share of emerging market economies in global GDP is expected to increase.
Regional economic integration, through bilateral and regional trade agreements, has been making significant contributions to expanding trade and investment. Regional trade agreements (RTAs) play a significant role in enhancing South-South trade, mainly by making markets more accessible. The number of South-South RTAs in Asia has increased steadily over the last few decades. Select South-South RTAs in Asia include the ASEAN Free Trade Area (AFTA), India-ASEAN Free Trade Area (FTA), China-ASEAN FTA, India-Malaysia Comprehensive Economic Cooperation Agreement (CECA), India-Korea Comprehensive Economic Partnership Agreement (CEPA), India-Sri Lanka FTA, SAARC Preferential Trading Agreement (PTA), China-Republic of Korea FTA, India-Gulf Cooperation Council (GCC) FTA, GCC-Singapore FTA, India-Nepal Treaty of Trade, India-Singapore CECA, Malaysia-Turkey FTA, Republic of Korea-Turkey FTA, Republic of Korea-Viet Nam FTA and Laos-Thailand PTA, among others.
At the regional level, Asia leads South-South trade, with a share of 73% in intra-regional trade of developing economies in 2014.
At the regional level, Asia leads South-South trade, with a share of 73% in intra-regional trade of developing economies in 2014. South-South exports of Asia increased more than six fold, from US$ 595.1 billion in 2001 to US$ 3.7 trillion in 2014. As a result, intra-regional trade among Asian economies witnessed a significant compounded annual growth rate (CAGR) of 13% between 2009 and 2014, following the global economic slowdown in 2009.
Among developing countries, India has today emerged as a vibrant economy fuelled by robust growth in its international trade and investment
Among the Asian economies, Eastern Asia dominated Asia’s South-South exports, accounting for nearly 70% of the region’s intra-trade in 2014, followed by South-Eastern Asia, Western Asia and Southern Asia.
Among developing countries, India has today emerged as a vibrant economy fuelled by robust growth in its international trade and investment. South-South cooperation has been an important element of India’s foreign policy. Apart from the Foreign Trade Policy that is announced every five years, India has put in place the Focus Africa, Focus LAC, Focus CIS and Act East Policies, among others.
India’s exports to developing countries has grown significantly in recent years.
India’s exports to developing countries has grown significantly in recent years. The share of developing countries in India’s total exports rose from 54.8% in 2004 to 65.6% in 2014, while the share of India’s imports from developing countries to its global imports increased significantly, from 36.3% in 2004 to 73.5% in 2014.