India joining a multilateral trade agreement such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would be “truly transformational,” Erik Berglof, Chief Economist of the Asian Infrastructure Investment Bank (AIIB), told Moneycontrol on the sidelines of the Kautilya Economic Conclave held in New Delhi from October 3–5.
“If India were to join CPTPP, that would be truly transformational,” Berglof said. “It would open up many of the issues that are currently challenges—trade integration, state reform, inclusivity, and long-term sustainability. Even if, in the end, India didn’t join, going through the thought process could be very beneficial.”
Reform and Integration
Berglof noted that CPTPP membership could help India address deep-seated structural inefficiencies and push for greater market integration.
“We’ve done a study of the green transition in India—one of the main obstacles that has to be addressed is that the state sector, including state-owned enterprises and financial institutions, are still very much overinvested in fossil fuels,” he said.
A Vision for Viksit Bharat
Berglof said India’s Viksit Bharat—or developed India—vision will require openness and inclusivity to sustain long-term growth.
“It’s very good to announce these long-term commitments because they align all actors in the economy toward that goal,” he said. “The challenge is whether India will be willing to open itself up to the extent needed to reach that objective.”
He emphasised that environmental and social inclusion must form the core of India’s growth model.
“This vision must also address the destruction of nature, contribute to addressing climate change, and ensure that implementation of these policies does not increase prices or costs for the most vulnerable,” Berglof said. “No one should be left behind, because large groups being left behind undermines political support for reform.”
Greater participation of women in the workforce, he added, could be “perhaps the single most important factor” in accelerating India’s growth trajectory.
On Stablecoins and Financial Stability
Turning to digital currencies, Berglof warned that the rush to adopt them without strong frameworks could backfire.
“We are still far from having an architecture that ensures stablecoins are safe and not abused,” he said. “If we don’t find a way to regulate them properly, they could undermine monetary policy and create new risks. The current momentum seems driven by interests not grounded in serious economic analysis.”
Climate-Linked Lending Ahead
Berglof also outlined AIIB’s future plans for India, noting that the bank is preparing to introduce climate-focused, policy-based lending, drawing from its experience in Bangladesh and Brazil.
“We would like to do something similar in India—connecting nature, climate, and health,” he said.
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