The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has been a major topic of discussion in recent times, with many countries eager to reap the benefits of this free trade agreement. However, there have been concerns raised about the potential impact of the CPTPP on India, particularly in light of the proposed inclusion of the CBAM (Carbon Border Adjustment Mechanism) in the agreement. According to sources, if CBAM is included in the CPTPP, it could negate the FTA benefits for India and even take away some of the concessions that the country currently enjoys.
The CPTPP is a free trade agreement between 11 countries, including Japan, Canada, Australia, and New Zealand. It aims to reduce tariffs and other trade barriers between member countries, promoting economic growth and cooperation. India, which is not a member of the CPTPP, has been closely monitoring the developments surrounding the agreement, as it could have a significant impact on the country’s trade and economy.
One of the major concerns for India is the proposed inclusion of CBAM in the CPTPP. CBAM is a mechanism that aims to reduce carbon emissions by imposing a tax on imports from countries that do not have strict environmental regulations. This could potentially put Indian exporters at a disadvantage, as they would have to pay additional taxes on their exports to CPTPP member countries. This could also lead to a decrease in demand for Indian goods, as they would become more expensive compared to goods from countries with stricter environmental regulations.
Sources have revealed that if CBAM is included in the CPTPP, it could negate the benefits that India currently enjoys under the existing free trade agreements with some of the member countries. This could also lead to a decrease in exports and a loss of revenue for the country. The sources further added that India could also lose some of the concessions that it currently enjoys under these agreements, which could have a significant impact on the country’s economy.
However, it is important to note that the inclusion of CBAM in the CPTPP is still under discussion and has not been finalized yet. India has been actively engaging with the member countries to voice its concerns and ensure that its interests are protected. The government has also been working towards strengthening its environmental regulations to align with international standards, which could potentially mitigate the impact of CBAM on Indian exports.
Moreover, India has been exploring the possibility of joining the CPTPP, which could provide the country with a level playing field and access to new markets. This move could also help India to diversify its trade and reduce its dependence on a few countries. The government has set up a committee to study the potential benefits and challenges of joining the CPTPP, and a decision is expected to be made soon.
In the meantime, the government has been taking steps to boost the country’s exports and reduce its trade deficit. The recently announced Foreign Trade Policy 2021-2026 aims to increase India’s share in global trade and promote exports of high-value goods and services. The government has also been working towards improving the ease of doing business and reducing the compliance burden for exporters.
It is also worth mentioning that India has been actively pursuing its own free trade agreements with various countries and regions, including the Regional Comprehensive Economic Partnership (RCEP) and the India-EU Free Trade Agreement. These agreements could potentially provide India with new opportunities and help mitigate the impact of CBAM on its exports.
In conclusion, while the inclusion of CBAM in the CPTPP could have a negative impact on India’s exports and economy, the government is taking proactive measures to address these concerns. The possibility of India joining the CPTPP and the ongoing negotiations for other free trade agreements could also provide the country with new opportunities and help mitigate the impact of CBAM. It is important for India to continue engaging with the member countries and work towards finding a solution that is mutually beneficial for all parties involved.
