Second, I will attempt to highlight India’s perspective on the global imbalances. While doing so, I would try to cover the following aspects: (a) India’s role in global imbalances, (b) approach to global consensus on causes and policy responses, (c) possible impact of global imbalances on India, and (d) the emergence of oil as a new factor in the policy debate on global imbalances.
In contrast, trade patterns within Asia are now much richer on the basis of the sophisticated vertical division of production processes. Countries are specializing in the optimal parts of the supply chain on the basis of their resource endowment and comparative advantage. This process is being propelled by foreign direct investment (FDI) coming from both within and outside the region.