We explore the relative positions of China and India in the international
fragmentation of automobile production by analyzing disaggregated trade flows, distinguishing between final and intermediate goods. The size and composition of trade significantly moved in favor of components trade over the last decade, but major differences exist between the two
countries; China is a net car exporter, while the opposite is true for India. We find evidence of increasing importance of two-way trade in vertically differentiated goods, indicating that China and
India are becoming more and more active participants into the vertical division of labor in automotive production.
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