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Vertical Integration of Industries in South Asia
(2013-12-06) De Mel, Deshal; Jayaratne, Suwendrani
In this study authors examine the prospects for vertical integration of industries in South Asia. Authors begin with a literature review and an overview of existing intra-industry trade in South Asia. Based on the existing intra-industry trade study examines sectors where there has been some intra-industry trade in more detail in the form of case studies. The two initial sectors are garments and textiles and the automobiles sector. It was also found that there is relatively high levels of intra-industry trade between India-Sri Lanka, possibly due to the impacts of the bilateral Free Trade Agreement these countries are party to. These three case studies provide greater insights into the opportunities and challenges to industrial integration in South Asia. Authors then draw on lessons from other regional bodies that have seen greater success in invigorating the trade-investment nexus, with particular reference to ASEAN. Finally, the lessons from international experiences and experiences within South Asia will be combined to draw clear policy prescriptions that could be engaged in to enhance the trade-investment nexus in South Asia.