US' TPP-exit favours India

New Delhi: US President Donald Trump's first executive orders to come out of the proposed Trans-Pacific Partnership (TPP) should favour India. TPP — a proposed free trade agreement (FTA) of 12 pacific rim nations — was feared in India as it might have hit the country’s export to its member nations.

It was proposed by the United States to bypass the WTO where India has stood its ground to protect its interests. TPP would have hit not the only export of finished products but also the export of much intermediary or raw material to the 12 member nations.

“Definitely it is a good development for India. It was an issue not only of export of Indian products to the US but in TPP you have issues like yarn forward rules which may have affected exports of many of India’s intermediaries to these member countries also. So it is not only the issue of India getting better access to the US, it is also overall good for exports of India’s intermediaries to members of TPP,” said Ajay Sahai, director general and CEO, Federation of Indian Export Organisations (FIEO).

India’s export to the 12 TPP countries stood at  around $79.5 billion in the fiscal year 2014-15. Centre for Policy Research in a paper had said that the TPP is expected to make around 11,000 tariff lines duty-free for its members. The paper also said that this extensive tariff elimination will definitely result in a loss of competitiveness of Indian exports in these markets.

“Another study has said India will lose  $2.7 billion in exports, with additional billions being lost as more countries join TPP,” the paper had said.

Japan has already indicated that if the US comes out then there is no reason for TPP to exist. This even as Australia said on Tuesday that it was working to recast the TPP and opened the door for China to sign up.

“There is also the opportunity for the TPP to proceed without the US. Certainly, there is the potential for China to join the TPP,” said Australia Prime Minister Malcolm Turnbull.