The challenge posed by the proposed mega-regional trade pact – the Trans-Pacific Partnership (TPP) – will impact India’s exports significantly and the country would do well to make a concerted all-round effort to prepare for and undertake domestic market reform and push for not just export of manufactures but also of services and agricultural products, Suresh Prabhu, Union Minister for Railways, said here today.
He was addressing while inaugurating the conference on ‘Changing Global Economic Scenario: Implications for India’s Trade Policy and Make in India Programme’, organized jointly by FICCI, International Institute for Sustainable Development (IISD) and Centre for WTO Studies.
Prabhu said, “Change is inevitable and we have to change ourselves with the impending change” in the global economic architecture.
“We need to find out how to create a legally binding framework where every country is a winner,” he added.
The commerce ministry in its five-yearly (2015-20) foreign trade policy released earlier this month said the new features of the global trading landscape such as mega-regional agreements will profoundly affect India’s trade.
“They go well beyond trade in goods and services into areas such as investment, competition (including state-owned enterprises), intellectual property, labour, environment, government procurement, transparency, regulatory coherence and dispute settlement,” it said.
Earlier, while addressing a panel on senior policy makers, Rajeev Kher, Commerce Secretary, Government of India, said that India must recognize the emerging challenges from the mega regional agreements currently under negotiation, and start preparing right away.
He added that the need of the hour was to rev up the domestic economy keeping in mind a long term growth.
Besides focusing on manufacturing and exports, he said that services sector was extremely important.
Department of Industrial Policy & Promotion (DIPP) Secretary Amitabh Kant said that India was the least integrated amongst the developing economy, hence was not being able to become an effective part of the global supply chain.
He added that mega regional agreements such as Trans Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) would lay down new standards and disciplines for global trade which would be highly competitive. He said that China had already started preparing to enter this new world. India, too, needs to make radical reforms in its policies and mind-set and make it easier for industry to do business in the country.
Kant said that India needed to focus on reduction of trade barriers, integrate its economy, enhance connectivity by creating infrastructure, establish large logistic houses, boost efficiency and competitiveness, reduction in transaction costs and reform in services.
In his presentation, Arvind Subramanian, Chief Economic Adviser, Ministry of Finance, pointed out that India’s exports had stagnated and experiencing reduced buoyancy. He stated that India needs exports at all costs and added that ‘Skill India’ should complement ‘Make in India’.