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For several years, India has aspired to become a member of the Asian-Pacific Economic Cooperation Organisation, which was established in 1989 as a premier regional institution to promote trade and investment linkages in Asia-Pacific. Despite having close political, economic and strategic ties with many of the member countries of Apec, India's request for becoming a formal member of the group, made in 2007, is yet to be accepted. This has limited India's presence in the region. The grouping has 21 countries with 42 per cent of the world population, 57 per cent of the world gross domestic product and 47 per cent of world trade.

In recent decades, India has had closer interaction with the Apec economies. Last year Prime Minister Narendra Modi received an invitation from Chinese President Xi Jinping to attend the 2014 Apec summit as an observer. Though Mr Modi didn't make an appearance, the gesture signals India's strategic importance in the region.

Asia-Pacific economies are important for India as they account for 35 per cent of India's merchandise trade, 27 per cent of the foreign direct investment inflows and 40 per cent of FDI outflows. Further, the Government's Act East policy seeks to foster deeper engagement with the East Asian countries and is addressing infrastructure and connectivity needs in the neighbourhood.

India has also several bilateral and multilateral agreements with many countries of the Apec economies. It has signed comprehensive economic cooperation agreements in goods and services with Singapore and Malaysia and is in negotiations with Australia and Indonesia. It has a free trade agreement with Thailand.

These increase the synergies between India and the Apec and have been possible because of India's liberal trade policy. This has led to relaxation of tariff and non-tariff barriers and simplification in investment rules. India, however, remains excluded from the Apec club because, compared to many Apec members, it has not fared well on reforms and liberalisation in the 15 areas identified by the Osaka Action Agenda including customs procedures, tariffs, non-tariffs measures and standards conformance, services, Government procurement, investment and intellectual property rights.

In recent years, India has taken several reform initiatives to facilitate its membership to Apec. On the tariff front, it has made considerable progress; however, its average applied tariff remains high, compared to Apec countries. Lower these tariffs will not be easy because of infrastructure bottlenecks and widening trade deficit.

India is ranked 54 on the logistics performance index by the World Bank which is relatively low compared to most Apec countries. It will need to simplify customs procedures and increase transparency. The Government is taking some steps in this regard as new foreign trade policy (2015 to 2020), announced in April, stands proof.

India has also undertaken service sector liberalisation and improved its position in construction, maritime transport, and telecom and computer services. However, it is not positioned well on legal, air transport and insurance services. India's investment regime is open and favourable in most sectors except, multi-brand retail, insurance and real estate development. However, the ease of doing business index has ranked India 142 - much lower than Apec countries. With Make in India and Digital India initiatives, it is possible for the country to improve its rank.

Since Apec is committed to trade liberalisation, India's membership could bring in significant improvement in its trade and investment profile. Its fast growing economy can benefit from investments inflows that are vital for Make in India. Also, involvement with the Apec will enable India to participate in key policy-decision making for the region.

Apec too will benefit from a clearer understanding of the domestic complexities in India. Apec cooperation has the potential to scale up India's performance and improve its ranking in the areas where it lacks now. India has fared well in areas like services, Government procurement and competition. However, it needs to upgrade its trade facilitation procedure, standards and conformance.

Becoming a member of Apec will not only help India become a manufacturing powerhouse but also enable it to prepare for the emerging mega FTAs such as the trans-Pacific partnership and free trade pact of the Asia Pacific which are going to change the way global trade takes place in the future. Apec presents the right opportunity for India to be a part of this changing global trade system.

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