India’s exports are not expected to be hit in a major way by the TPP pact signed between the 12 Pacific Rim countries. Estimates are that India will face an export loss of not more than 0.3 per cent. TPP is a regional trading arrangement between the US, Japan, Canada, Australia, New Zealand, Singapore, Malaysia, Vietnam, Brunei, Peru, Chile and Vietnam.
The pact, yet to be ratified by each country, will result in the largest trading bloc with zero or low tariffs on most goods, easier investment norms and services flow but tougher IP rules and laws to protect corporate interests.
Had India joined the TPP, there would have been negative fall-outs. The intellectual property rules would have led to an increase in the number of off-patent drugs and sent prices of essential drugs soaring while the investor-state dispute rules would have infringed on the country’s policy space.
While some products from India, such as textiles and yarns, may face issues in markets like Vietnam because of rules in the TPP mandating use of local inputs by members to be eligible for zero tariffs for final products, for most other products Indian products are not likely to experience preference erosion because of the country’s trade pacts with individual members of the group.
Ustr.gov/tpp
