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India breathes easy with CPTPP as exports may not be affected

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is unlikely to dent India’s export prospects meaningfully due to the absence of its key market, the US. Instead it will cut tariffs in nations that together make up for just over 13 per cent of the global economy. With the US, it would have represented 40 per cent of world GDP.

CPTPP is the mega Asia-Pacific trade pact signed by 11 nations, including Japan and Singapore. But the deal could see more pressure being put on India to help conclude the 16-nation Regional Comprehensive Economic Partnership (RCEP) agreement at the earliest without being too emphatic about its own demands in the services sector.

The absence of the US is a relief for India’s garment industry. The US was the original proponent of the TPP but decided to withdraw from it fearing it would be the death blow for American manufacturing. The CPTPP is not expected to impact India much as six of the 11 CPTPP countries are already part of the group negotiating the RCEP in which India is also a participant.

CPTPP comprises Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Fears of key competitor Vietnam gaining duty-free access to the US, India’s single-largest market for such products, have abated.