Global economies of scale in the EU-India trade agreementare they the key to a return to economic growth?

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Type Article
Original languageEnglish
Pages (from-to)41-55
Number of pages15
JournalAsia Europe Journal
Volume13
Issue number1
Early online date24 Dec 2014
DOI
Publication statusPublished - 01 Mar 2015
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Abstract

Economies of scale are an alternative source of growth particularly at a time when countries are suffering from global economic malaise. The proposed EU-India free trade agreement holds substantial promise as this will create a combined market of over one and a half billion and generate economies of scale from intra-industry trade, which are likely to be concentrated in manufactured products such as chemicals, machinery and transport equipment. Bold action is needed on the part of politicians in both the EU and India to successfully negotiate the agreement given that this will enable both countries to reap the efficiency gains of global economies of scale, provide a significant competitive advantage over other major economies and deliver the necessary spur to shake both the EU and India out of their current economic stagnation.