While fifteen Asian countries agreed to terms to the world’s one of the biggest trade pact, India decided to reject the Regional Comprehensive Economic Partnership (RCEP) trade pact. New Delhi delayed its decision on joining and showed an indecisive attitude over one of the greatest initiatives in the region writes the Global Times.
India insisted to be holding back due to the same concessions they always had. New Delhi said, “the RCEP Agreement does not address satisfactorily India’s outstanding issues and concerns.”
The RCEP Agreement is backed by China and also brings in the 10-member Association of Southeast Asian Nations (ASEAN), and Japan, South Korea, Australia, & New Zealand together.
The Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement in the Asia-Pacific region between the ten member states of the Association of Southeast Asian Nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and their five FTA partners (Australia, China, Japan, New Zealand, and South Korea).
It was aimed to have an extensive impact on world economics, trade structure, and the geopolitical pattern. Indian industry was, however, apprehensive that the deal would lead to a surge in cheap imports from China with which India already has a trade deficit of over $50 billion.
Since Prime Minister Modi rose to power the government had been more in favor of regionalization and globalization. The government has steadily transformed its foreign policies and actively reformed the “Look East” policy to “Act East” policy and has been the greatest negotiator in the South East and Pacific region.
The RCEP might negatively impact the fragile manufacturing industry in India as well as the country is likely to lose greater market access to China. The RCEP agreement might possibly burden the small workshops and local businessmen and jeopardize the “Make in India” campaign over the three largest producers China, South Korea, and Japan.
It’s been India’s prolonged ambition to become a powerful country with diplomatic discourse. With the drastic reform in policies, India has achieved a balanced profit in the economy as well as the diplomatic relations around the world.
Joining RCEP would drag down India’s dynamism over the years. India is not in a state to agree to the agreement as it stands due to differences over tariffs, its trade deficit with other countries and non-tariff related barriers.
As one of the largest countries with the second largest population, India should take authority and responsibility seriously by continuing to share the dividends brought by multilateralism and maintaining diplomatic ties.
However, India has frequently avoided the conversation to block and delay the RCEP Agreement for its own interest. Instead of supporting the multilateralism brought by the agreement, India has tried to detain the process. In the near future, India might find it difficult to cope up with international development and lose the benefits of protectionism.