The production and use of low-carbon energy technology and services, such as renewable energy, are imperative for Asia's emerging economies (which are heavily dependent on imported energy and resources) to tackle global environmental issues like climate change. Acknowledging this fact, recently, governments in the Asian region individually have been taking effective actions in the form of voluntary targets and policy commitments to improve the production and use of low-carbon technology, such as solar, wind, geo-thermal, and so forth. Nevertheless, the diffusion of these technologies has been through liberalized trade, which has been low compared with trade and investment in other energy intensive sectors. Though effective tariffs are low, non-tariff barriers or behind-the-border constraints are very high. In this exploratory study, the potential for increased exports in low-carbon technology and services under a grand regional coalition, partial regional coalition, and stand alone scenarios is studied. We find that production, trade, and investment in renewable energy technologies are very low regionally. There is a large gap between the demand for and the supply of low-carbon energy technology and associated pollution abatement services. Behind-the-border constraints that exist within the exporting country, such as poor infrastructure and inefficient institutions, create this gap between actually realized and potentially possible exports. This supply gap provides an opportunity for those emerging Asian economies, which have the potential to contribute to the manufacturing of such technologies individually and collectively pooling their physical and human capital.

Drawing on the convergence theory, one would expect that the export performance of India (a latecomer to integrating with the global economy) would be at least on par with that of China because China's performance has happened as predicted by the theory. This study, using performance measures based on the endogenous growth theory that internalizes the ability to export the maximum possible exports under the determinants of exports including the existing behind the border and beyond the border constraints, shows that India's export performance is still far behind that of China. The implication of this study is that India's reform measures need to be bolstered effectively to catch up and to overtake China.

Manufacturing played an important part in sustaining India's economic growth in the 1970s and 1980s. The economic reforms of the early 1990s did not lead to sustained growth of the manufacturing sector. After an acceleration in the mid-1990s, growth slowed in the decade's second half. The analysis presented in this paper reveals that manufacturing-sector growth in the postreform period is “input driven” rather than “efficiency driven,” with significant levels of technical inefficiency. The paper advocates policies to improve production efficiency by encouraging investment in research and development, technical training for workers, and technology-aided managerial processes.