As the US and 11 other nations reached a landmark deal on the Trans-Pacific Partnership which aims to become the world's largest free-trade zone linking 40 per cent of the global economy, a top US industry advocacy has argued for India's integration into global trade pacts.
"For India to reach its ambiguous economic growth targets, it needs to be integrated into global trade pacts, especially those that drive commerce in the dynamic Asia Pacific region," Mukesh Aghi, president of US India Business Council (USIBC) told PTI after the deal on TPP was announced by the US and 11 other countries yesterday.
The 12 countries Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam constitute 40% of the global economy.
"India's exploration of APEC membership, which is currently an informal precursor to TPP membership can unlock India's potential as a global manufacturing hub and deepen its ties with the global economy," Aghi said In fact USIBC's outgoing Chairman Ajay Banga of MasterCard has been strongly arguing in favor of India joining TPP.
"APEC membership would help prepare India to participate in the emerging megaregional trade arrangements, such as the Trans-Pacific Partnership (TPP) and the Free Trade Area of the Asia-Pacific (FTAAP) that will define the future of global trade," Banga and the former Australian Prime Minister, Kevin Rudd, wrote in The Wall Street Journal in July.
Aghi said recent study by the Peterson Institute for International Economics demonstrates that if India were to complete its domestic reforms and join an ambitious TPP agreement that included all of the APEC countries, it could potentially expand exports by more than USD 500 billion per year.
"On the other hand, if it were to stand outside the negotiations, while other countries entered a regional trade agreement, the Peterson study forecasts export losses of USD 50 billion per year, as trade is diverted away from India," Aghi said. However Indian officials argue that India is not left out of such international trading agreements. In Washington last month, the Commerce Minister Nirmala Sitharaman refuted that India is being left out. "If you looking at India being left out.
That's not really true," she told a Washington audience when asked about India not being part of the Trans-Pacific Partnership, of which India is not a part.
"We are very actively engaged in ARSEP (Asean Regional Comprehensive Economic Partnership) which consists of ASEAN and ASEAN FTA countries. So we actually in ARSEP are moving faster along with other members," Sitharaman said during a panel discussion on India-US economic ties organised by the Carnegie Endowment for International Peace, a top American think tank.