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India needs to quickly conclude its Free Trade Agreements with major (FTAs) markets to manage competition to its exports from the recently agreed Trans Pacific Partnership (TPP).
The FTAs negotiations should be concluded with markets like Australia and Canada as well as the broader Regional Comprehensive Economic Partnership (RCEP) which will also link the Indian exports to the Asia-Pacific markets including China, a Singapore Think Tank said.
The TPP is expected to expose India to a couple of significant diplomatic challenges, said Dr Amitendu Palit, a Senior Research Fellow and Research Lead (Trade and Economic Policy) at the Institute of South Asia Studies (ISAS).
India must act soon to avoid possible adverse implications on its exports to TPP member-markets because of lower tariffs on intra-TPP exports compared with those on Indian products, Dr Palit said.
But more importantly, the TPP would require India to search for closer alignment between its foreign and trade policies, he added.
India’s foreign policy, which has become distinctly proactive and conscious of opportunities in foreign markets under the Modi Government, is aiming to posit India as a major actor in the Asia-Pacific.
“India needs to study the TPP carefully for anticipating its possible impact on its RCEP negotiations,” he urged.
The TPP is also likely to become the yardstick for various commitments to trade liberalisation for countries bidding for APEC membership, such as India. In all, the pressure on India to adopt ‘TPP-type’ rules in its trade policies is expected to increase over time, said Dr Palit.
“Such intentions are visible from India’s desire to join the APEC, expand its sphere of influence in the region through the ‘Act East’ strategy and also growing bonhomie with major Pacific nations – the US, Japan, Australia, Canada and Korea.
“New Delhi’s greater strategic proximity with these countries, all of whom are part of the TPP – while facilitating a deeper foothold in the region and greater say in regional affairs – will be accompanied by external demands on India for more trade liberalisation and concessions on market access.
“India’s trade policies, till now, have fought shy of such demands emerging from regional trade negotiations. The key diplomatic challenge for India will be to balance the contrasting postures of its trade and foreign policies in pursuing greater integration with the Asia Pacific,” he pointed out.
ISAS is an autonomous research institute at the National University of Singapore. fii-news.com
