The Trans-Pacific Partnership (TPP), or the mega-regional free trade pact led by the U.S. and including 11 other Asia-Pacific countries, is likely to indirectly impact India’s exports in several industrial sectors such as textiles, plastics, leather, clothing, cotton and yarn, besides the country’s regime on investment, labour standards, intellectual property rights (IPR), government procurement and State-owned enterprises (SOE).
The TPP agreement (which India is not a part of) was reached in October last year. Indian government will have to consider improving the country’s standards in areas such as labour laws.
Some TPP standards were higher than that of the WTO norms, including on IPR and possible ever-greening of patents, which could hurt India’s pharma sector. The operations and the production methods of India’s public sector units (or SOEs) could also be constrained due to the TPP.
Several Indian export sectors such as cotton and yarn could be affected as trade may be diverted to the TPP region due to its benefits of low or nil duties. Indian companies may have to consider investing in the TPP-region countries and start producing from there.
Eventhough TPP, RCEP and the Transatlantic Trade and Investment Partnership (a proposed mega-regional between the U.S. and the European Union) excluded African countries, India would also have to focus on improving its trade with African countries. Meanwhile, India is also considering engaging with the Asia-Pacific Economic Cooperation countries to ensure that it did not miss out on the emerging trade dynamics.