Prime Minister Narendra Modi, in his address at the recent RCEP summit in Bangkok said “The present form of the RCEP Agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP. It also does not address satisfactorily India's outstanding issues and concerns. In such a situation, it is not possible for India to join RCEP Agreement.” With this, the government announced that India will not be a signatory to the Regional Comprehensive Economic Partnership (RCEP) over concerns about getting swamped by imports under the agreement which domestic industry and agriculture at risk that haven’t been satisfied. The RCEP, which includes China and the ASEAN nations, aims to cover about a third of the world economy and half its population.
A joint statement by the RCEP countries issued in Bangkok late on Monday said that the 15 remaining nations will begin formal work towards inking the pact in 2020 while still making efforts to resolve India’s objections. The 15 countries are the 10 Asean nations, China, Japan, South Korea, Australia and New Zealand. “India’s final decision will depend on satisfactory resolution of these issues,” the statement said further. NITI Aayog VC Arvind Panagariya has also said that said India hasn’t shut the door on the RCEP and room for negotiations still remains.
Strong reservations from domestic industries and dairy farmers about the trade pact have been constant. India’s trade deficit with the RCEP nations is $105 billion, of which China alone accounts for $54 billion. The main concern remains over Chinese manufactured goods and dairy products from New Zealand flooding Indian markets, hurting domestic interests. The trade agreement was also seen as being detrimental to the government’s “Make in India” initiative. India was also seeking specific rules of origin to ensure the trade pact was immune from abuse by non-partner countries along with an auto-trigger mechanism to protect it from import surges. Other key areas of concern like Ecommerce and trade remedies also failed to find any satisfactory redressal. India had proposed different levels of tariff concessions for China to safeguard its domestic industry from cheap imports which weren’t accepted. Additionally, the lack of any credible assurance on market access and non-tariff barriers for India was also a major deterrent.
While negations remain probable, india’s current stance on the agreement were made clear by the PM in his address to the summit: “When I measure the RCEP Agreement with respect to the interests of all Indians, I do not get a positive answer,” Modi said. “Therefore, neither the talisman of Gandhiji nor my own conscience permits me to join RCEP.”
Tags : India, China, ASEAN, Economics, Trade Deal