Introduction

India's recent economic performance has attracted widespread attention. With an average annual rate of growth of 8% sustained over the past few years and a robust outlook for the future, India is emerging as a driver for growth in Asia. Economic reforms undertaken since 1991 have deepened India's economic integration with the world economy, and trade and international investments now occupy a far more important place in the economy than ever. India has also taken a keen interest in regional economic integration with South Asia and East Asia. It is an active member of the South Asian Association for Regional Cooperation (SAARC) and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), among other initiatives for regional integration in South Asia. It has also adopted a Look East Policy to guide its foreign economic relationships and deepen engagement with the Association for South East Asian Nations (ASEAN) and East Asian countries, and has articulated a vision of broader pan-Asian economic integration.

This paper briefly overviews the macroeconomic performance of the Indian economy and the emerging patterns of its global economic integration. It also discusses India's approach to regional economic integration in South Asia and East Asia. Its sections (i) provides an overview of the macroeconomic performance of the Indian economy, the economic outlook, and global economic integration against the background of reforms undertaken since 1991

INTRODUCTION

The Indian economic performance in the recent years has been attracting widespread attention. With over 8 per cent growth sustained over the past few years and robust outlook for the future, India is emerging as a growth driver for the Asian and the world economy. With the reforms undertaken since 1991, Indian economy has deepened her economic integration with the world economy and trade and international investments now occupy a far more important place in the economy than ever. Alongside the global economic integration, India has also taken a keen interest in regional economic integration in South Asia and East Asia. It is an active member of SAARC and BIMSTEC, among other initiatives for regional integration in South Asia. It has also adopted a Look East policy to guide its foreign economic relations to deepen her engagement with ASEAN and East Asian countries, and is articulating a vision of broader pan-Asian economic integration.

This chapter briefly overviews the macroeconomic performance of Indian economy and the emerging patterns of its global economic integration. It also discusses India's approach to regional economic integration in South Asia. It makes some comments on the relevance and potential of recent approaches towards regional cooperation in South Asia such as SAFTA and some proposals for making them more effective. The structure of the chapter is as follows: Section 2 takes stock of the macroeconomic performance of the Indian economy, its outlook and global economic integration against the background of reforms undertaken since 1991. Section 3 overviews India's approach to regional economic cooperation in Asia with particular reference to South Asia. Section 4 presents some indicators of India's growing integration with East Asia. Section 5 makes some concluding remarks.

MACROECONOMIC PERFORMANCE, OUTLOOK AND GLOBAL ECONOMIC INTEGRATION

The recent performance of Indian economy is attracting a lot of attention worldwide for its dynamism and long-term prospects. There has been a progressive acceleration in the growth performance of the Indian economy over the past five decades. In the first thirty years of independence, India's growth rate averaged 3.5 per cent which was derisively called “Hindu rate of growth”.