If USA pulls out from TPP, how will it impact India? Examine.

TPP(Trans pacific partnership) is an undergoing trade negotiation between 12 countries of pacific ring. India feared as below that once the TPP is formally declared

  1. trade diversion will happen in terms of goods and services ,investments
  2. stringent non tariff measures will have its affects on exports

With Trumps election, who is an opponent of TPP from the first, it is clear that USA will be out of TPP. With this India has unintentional advantage as follow below

  1. As feared before , trade diversion might not take place as heavily as expected which is in interest of India
  2. Cancellation of TPP might increase the focus on RCEP in which India is free-trade partner. Member countries may become more accommodative towards India’s demand for greater access to markets.
  3. The efforts of importing major provisions of TPP which are in fact stringent and highly standard into RCEP may not succeed for now.
  4. Trump by denouncing TPP  , may go back to WTO for multilateral trade deals which is in India’s interest as India always supported multilateral trade deals

But all is not well because US may pronounce the same trade issues of TPP through WTO in which case India is at disadvantage. In that case efforts are needed domestically to acquire preparedness across industries to compete globally.In and out Trumps indication of pulling out USA from TPP will benefit India .

 

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