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India needs to be integrated into global trade pacts: USIBC

07 Oct 2015 Evaluate

A top US industry advocacy, US India Business Council (USIBC) has argued that 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 USIBC after the deal on TPP was announced by the US and 11 other countries, said that 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.

Recently, 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. The 12 countries Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam constitute 40 per cent of the global economy.

Aghi further added that the recent study by the Peterson Institute for International Economics, demonstrates that if India joins TPP agreement that included all of the APEC countries and were to complete its domestic reforms, it could potentially expand more than $500 billion exports per year. On the other hand, if it were to stand outside the negotiations, while other countries entered a regional trade agreement, export losses of $50 billion per year, as trade is diverted away from India.

Earlier, the former Australian Prime Minister, Kevin Rudd and USIBC's outgoing Chairman Ajay Banga had said that APEC membership would help prepare India to participate in the emerging mega regional 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. Meanwhile, Commerce Minister Nirmala Sitharaman contesting India's exclusion from TPP had said that India is not being left out from TPP. The country is currently engaged in ARSEP (Asean Regional Comprehensive Economic Partnership) which consists of Association of Southeast Asian Nations (ASEAN) and ASEAN FTA countries and is actually moving faster along with other members.

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