Niti Aayog Vice Chairman Arvind Panagariya made a strong case for India joining international trade agreements at a roundtable at the Asia Society Policy Institute in New York on Wednesday, June 1. (Credit: IANS)
NEW YORK: India's membership in the Asian Pacific Economic Cooperation (APEC)
forum will likely be an important topic in Prime Minister Narendra
Modi's talks with Preisdent Barack Obama next week, according to Arvind
Panagariya, the vice chairman of the Niti Aayog.
thing I would hope would be on the agenda is India's entry into APEC,"
during the Modi-Obama summit, he told a roundtable at the Asia Society
Policy Institute here Wednesday.
Panagariya, who advocated an
"outward orientation" as a development strategy for India, emphasised
the need to join trade agreements. He said "APEC is a stepping stone"
on the way to other trade agreements. APEC by itself is not going to
get the country very far and it had to get into other arrangements, he
"If India is going to sustain a growth rate of eight to 10
percent over a period of 20 or 25 years, it cannot be done without
actually capturing some of the world markets" through trade
arrangements, he said. "The strategy of free trade agreements becomes
quite important part of the whole strategy (of development) that if you
have free market within a large region, India would have the right to
sell duty free into that market."
Founded in 1989 at Australia's
initiative, the 21-member APEC stretches from Australia to Peru and
includes the US, Russia, China and Japan representing 2.8 billion
people, 57 per cent of the world's gross domestic product and 47 per
cent of global trade. It had a moratorium on new members for a decade
which has now been lifted and India is actively lobbying to join it.
was committed to joining the APEC and had sought Japanese Prime
Minister Shnizo Abe's help when he visited India, Panagariya said.
about India joining the Trans-Pacific Partnership, the more
restrictive but ambitious trade pact pushed by the Obama administration,
Panagariya said candidly: "India is below the standards that are
required in the TPP."
It is too early to think ot the TPP, he
said. "A lot the things that India would need to do to be a member of
the TPP remain to be done on issues of intellectual property, labour,
standards, government procurement -- these are integral parts of the
The TPP agreement was signed by 12 Pacific-rim countries in February and does not include China.
seeking to join trade agreements, India also needs to act internally
on issues like trade facilitation so goods can move in and out of the
country fast without bureaucratic delays, he said.
One of the
problem areas for India in international trade is the lack of large
companies and that 73 percent of the workforce is employed by firms
with 20 or fewer persons, he said. The smaller units are less
productive and limited in competing on the global markets, he said.
bigger companies proliferate, they will define the ecosystem and
ensure that small and medium enterprises in their region would also
become highly productive, he said.
The big players "have to
compete with the best of the world markets", he said. "They will have to
be constantly on their toes. They will see to it that the small and
medium firms that are around them will do the same."
(Arul Louis can be reached at email@example.com)