Video: What Does India Have to Do to Get Into APEC?
U.S. President Barack Obama (R) meets with Indian Prime Minister Narendra Modi (L) in the Oval Office of the White House September 30, 2014 in Washington, DC. (Alex Wong/Getty Images)
The Asia Society Policy Institute is partnering with the Confederation of Indian Industry to convene an international task force to develop a strategy for India's entry to the Asia-Pacific Economic Cooperation. Learn more
Despite having a population of 1.2 billion and the world’s ninth largest economy, India remains excluded from several regional economic organizations like the Asia-Pacific Economic Cooperation (APEC) — a situation experts say is detrimental to both India and the international community.
“Business globally, and especially in the U.S., should be delighted by the prospect of India joining APEC,” said MasterCard President and CEO Ajay Banga on Monday. “An India that’s much more open, much more aligned with the trade protocols and practices of APEC members, is an India that is way better positioned for integration into global supply chains.”
Banga was speaking at the New York announcement of a new task force, convened by the Asia Society Policy Institute and the Confederation of Indian Industry, to help facilitate a path for India to join to APEC. Former Foreign Secretary of India Shyam Saran, one of several panelists appearing via Skype, emphasized that his country realizes the importance of international economic associations. “Let me say very categorically that India is very keenly interested in becoming part of APEC,” he said, adding that the country has in fact applied in the past but was stopped by a moratorium on new members.
Panelists pointed out that some member countries remain skeptical of India’s ability to conform to APEC trade norms and culture. “The U.S. reluctance to embrace India into APEC for these many years has been a fear that India would slow down the process of moving toward greater trade facilitation and liberalization,” Fred Bergsten, a senior fellow at the Peterson Institute for International Economics, said. “India, along with some other countries, has sometimes caused problems for global trade negotiations.”
Bergsten added that if India were to join APEC, it could pave the way to membership in the even more exclusive Trans-Pacific Partnership (TPP). Being part of an organization like this, according to Peterson Institute estimates, could expand India’s exports by as much as $500 billion per year by 2025.
Sunil Kant Munjal, joint managing director and chairman of Hero MindMine Institute Ltd., said that it’s hard for India to institute the needed reforms as quickly as countries like China did. “There’s literally not one other large economy in the world that has given civil liberties first and has tried to turn itself into a market economy and a global market economy,” he said. “It is a fairly unique experiment in that sense, so some of the things have been slower than we’d like, but it’s also because of the complex and extremely diverse society that we have in India.”
Asia Society Policy Institute President Kevin Rudd noted that India’s delayed entry is as much about the negotiation process as internal economic issues. “The dynamic of any negotiating room at the top is always in the direction delay, it is rarely in the direction of decision,” Rudd said. “There are two things that are eternal: the kingdom of heaven and the bureaucracies of our various countries.”
In the video below, Bergsten, Banga, and senior fellow at the Council on Foreign Relations Alyssa Ayres discuss some of the impediments that remain in the way of India’s inclusion to APEC, and how they might be overcome:
Watch the complete program: