Regional Comprehensive Economic Partnership & India’s concerns
The Regional Comprehensive Economic Partnership is a proposed Free Trade Agreement among 16
nations namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore,
Thailand, Vietnam, Australia, China, India, Japan, New Zealand and South Korea. Efforts for formation of RCEP started seven years ago in 2012. Idea behind this FTA has been promotion of trade and investment activities in the member nations.
RCEP as trade block will be biggest FTA with 40 percent of global trade, RCEP members have total
population of 3.6 billion means bulk of world population living in this area. But India decided not to sign this agreement and be away from RCEP, as some factors are not as per need of India. “The present form of the RCEP Agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP,” Prime Minister shri Narendra Modi said in his address at the RCEP summit in Bangkok, according to a tweet by official broadcaster Prasar Bharati.
India’s Concerns
India’s trade deficit with the RCEP nations is $105 billion, of which China alone accounts for $54 billion.The main worry is over Chinese manufactured goods and dairy products from New Zealand flooding Indian markets, hurting domestic interests. Domestic industry and dairy farmers had strong reservations about the trade pact. Sri Lanka is already giving a tough time to Indian spice growers. Vietnam and Indonesia have very cheap rubber to export. The trade agreement was also seen as being detrimental to the government’s Make in India initiative.
The Rules of Origin
The rules of origin or country of origin is one point were India could not get satisfactory arrangements. The rules of origin or country of origin can be understood by an example, if country has decided to lower tariff on a product of country B, country B will have to prove that product has grown or really manufactured in country B, merely importing from country C to B, repackaging and exporting to country A will not work. India wanted to have this arrangement but a consensus could not be formed.
India wanted to have liberal trade in services and information technology among the member nations.
India wants easier movements of professional among the member nations to make RCEP commercially more meaningful.
Some of other apprehensions cited by media are Niti Aayog’s suggestions that India, in past, has not been benefited by FTA, trade deficit has only widened against India after FTA signed by India. China may dump more products in Indian market adversely impacting domestic industry in India, farmers were fearful of dairy products imports from New Zealand.
Suggestions are that India’s business environment should be more competitive, government should
further made rules and regulations business friendly, India should emerge as innovation hub of the world. These suggestions were discussed with the students at RBMI campus, Bareilly.
