India can boost exports by $500 billion with trade liberalization: study

Trade liberalization would enable India to increase its annual economic growth to 8 to 10 percent.

person-690245_640By Raghavendra M

India could boost its exports by $500 billion per year by joining the next stage of the Trans-Pacific Partnership (TPP) trade agreement, says a research.

“India’s Rise: A Strategy for Trade-Led Growth”, a study by C Fred Bergsten of the Peterson Institute for International Economics, suggests that trade liberalization would enable India to increase its annual economic growth to 8 to 10 percent, as targeted by the Narendra Modi government.

By implementing the economic reform program, India could create millions of new jobs, which lead to substantial reduction of poverty, Bergsten said in a statement. His study was released in Washington On September 17.

Meanwhile, Bergsten has also warned that if India remains outside the new global trade network, it will lose as much as $50 billion of current exports because of increasing discrimination against it by other countries.

This network includes the plurilateral agreements on international services, environmental goods, and government procurement now being negotiated in and around the World Trade Organization as well as the TPP and other megaregional arrangements, he said.

To be accepted into these agreements, and to participate in them effectively, India will have to implement the economic reform program proposed by the Modi government.

“It will also have to liberalize its own markets to international trade and investment in order to persuade other countries to open their markets to its exports”, he said.

To join the TPP, or a Free Trade Area of the Asia-Pacific as proposed by China that might succeed it, India will probably first have to join the Asia Pacific Economic Cooperation (APEC) forum within the next couple of years.

“President Barack Obama has welcomed India’s interest in APEC and, if India adopts the needed policy changes, should strongly support Indian membership, Bergsten further said.

Bergsten is a member of the President’s Advisory Committee for Trade Policy and Negotiations and has chaired the Private Sector Advisory Group to the US-India Trade Policy Forum since 2007. He has authored 43 books on a wide range of international economic policy issues.

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