Indian exporters will have to improve their product competitiveness to remain in the business following the finalisation of the mega trade deal among 12 countries, including the US, say experts.
As India is not part of Trans-Pacific Partnership (TPP) trade agreement, domestic exporters will have to “significantly” enhance their product competitiveness to remain in the business, said Biswajit Dhar, professor at the Jawaharlal Nehru University.
As many as 12 countries including the US, Australia and Japan yesterday reached the final agreement on TPP, which aims to become the world’s largest free-trade zone linking 40 per cent of the global economy.
TPP is billed as the largest regional trade pact.
The mega deal will pose challenges to Indian exporters in terms of standards and quality of products that the TPP members would set.
“Member countries in the TPP will have a separate set of standards and quality norms and Indian players have to conform to those in order to export products at least in those markets. We are not yet working in those areas but over the time we have to put in place the systems,” he added.
Echoing views, international trade expert with Indian Institute of Foreign Trade (IIFT) Rakesh Mohan Joshi said that the pact would impact India’s trade.
“The country’s exports have to become more competitive in TPP market,” Joshi said.
The US accounts for 10-13 per cent of India’s exports. Its exports to the US stood at USD 42.5 billion out of total outward shipments of USD 310 billion in 2014-15.
Think-tank Consumer Unity and Trust Society (CUTS) said that there will be some negative impact on the Indian trade.
“Most of the impact will be felt by labour-intensive sectors such as textiles and clothing. Their market access to some of those countries will face more competition,” CUTS International Executive Director Bipul Chatterjee said.
Chatterjee added that much of those negative impact will be on account of higher sanitary and phyto-sanitary and technical standards.
India’s exports contracted for the ninth month in a row, dipping 20.66 per cent in August to USD 21.26 billion, due to steep decline in engineering and petroleum shipments.
India, too, is negotiating a mega trade deal – Regional Comprehensive Economic Partnership (RCEP).
Joshi said that now India will have to negotiate hard for its benefit in this trade deal as some TPP members are part of this pact also.
TPP members also include Brunei, Chile, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
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