What is the TPP agreement? How is it significant for the Indian economy?

Context:  Emerging trends and new agreements in global economic partnership. Their main focus is on advocating mutually advantageous and sustainable trade.
About TPP:

• Trans Pacific Partnership (TPP)Agreement is a trade agreement among twelve of the Pacific Rim countries (excluding China).
• The finalized proposal was signed on 4 February 2016 in Auckland, New Zealand, concluding seven years of negotiations.
• The agreement aim to "promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in the signatories' countries; and promote transparency, good governance, and enhanced labor and environmental protections."
• The TPP contains measures to lower both non-tariff and tariff barriers to trade, and establish an investor-state dispute settlement mechanism.
• As the World Bank noted in a study in January on the macro-economic implications of the TPP, the pact could, by 2030, help boost the overall GDP of member-countries by 1.1 per cent. And given that the grouping includes two of the world’s three largest economies — the U.S. and Japan — and overall accounts for more than one-third of the world’s economic output, the spillover benefits would be significant.

Significance:

• For India, the agreement provides an opportunity to reflect on its approach to multilateral trade talks, while underscoring the need to build a strong multi-disciplinary cadre of specialist free-trade analysts and negotiators.
• Benefits from these agreements will help mitigate some of the export losses that India may face in leather goods, textile, and plastics on account of trade diversion due to TPP. Aiming to diversify export destinations to hitherto untapped markets like Latin America and Africa would also help.

Conclusion & future aspect-

• Like China, India must focus on strengthening its own economy than worry about the TPP.
• From ensuring the creation of a domestic common market through adoption of the long-delayed Goods and Services Tax, to building its own multilateral bloc of emerging and developing economies that can act as a bulwark against TPP-like groupings, India has its task cut out.
• Internationally, India should conclude, on a priority basis, its ongoing free trade negotiations.
• On the domestic front, India should accelerate the process of making its products more cost-competitive.

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