Regional Comprehensive Economic Partnership
RCEP is a proposed free trade agreement (FTA) between 10 ASEAN economies and its 6 other partners.
These 6 countries- India, China, Japan, South Korea, Australia and New Zealand already has a free trade agreement with ASEAN.
The purpose of RCEP is to create a unified market to promote trade and China investment among the 16 countries involved in the agreement.
In its original form RCEP represents 45%of the global population, 40% of global trade and 30% of global GDP.
RCEP negotiations formally begin Cambodia in November 2012 at the ASEAN Summit held in After India's decision not to join it, now 15 countries are left in it by which the final agreement will be signed by the year 2020. likely to be done.
India's concerns regarding RCEP India
RCEP does not reflect its core spirit and guiding principles. It has not satisfactorily addressed the issues and concerns raised by India. In such a situation, it is not possible for India to join the (RCEP) agreement. India's concerns regarding RCEP can be understood from the following points
Financial crisis:- The Indian economy is currently in a difficult phase due to slowing GDP growth rate. In such a situation, Indian industries and the agricultural sector will face unequal competition from cheap exports from the countries involved in the agreement with a mega free trade agreement (RCEP). This will increase the pressure on the Indian economy.
Trade deficit:- India has a trade deficit with 11 of the 15 RCEP countries. The trade deficit with these countries has increased from $54 billion in 2013-14 to $105 billion in 2018-19.At present, India shares 20% of its total exports and 35% of itsimports with RCEP countries.After joining this free trade agreement, India's trade deficit will increase , which will affect the trade balance of the country.
Impact on the interests of industries and farmers:- "China and ASEAN countries have a strong service sector.
In such a situation, after joining the agreement, the service sector of the Indian economy may also be affected Agriculture Sector Domestic producers engaged in the production of dairy products and spices will face the cheap fate of South Asian countries.
The Indian dairy sector will face a tough challenge from dairy products from Australia and New Zealand as the RCEP does not provide adequate safeguards for them.China's challenge Out of India's $105 billion trade deficit with RCEP countries, China has a trade deficit of $53 billion.China is looking at RCEP as a plan to keep its manufacturing industries alive.
China limits the access of Indian goods to its markets and imports its cheap products into India.Industrial organisations of India have been warning about them issue of the connecting networks of RCEP countries. India is demanding an auto-triggered mechanism that allows it to increase duties on imported products beyond a certain limit.
No credible assurances were given on India's concerns about non-tariff barriers and greater access tothe market. Indian concerns regarding misuse of 'Rules of Origin' in RCEP were also not properly addressed.The criteria used to determine the national source of a product are called 'Rules of Origin'. The base year for reducing tariff in RCEP agreement is 2014. but India year 2019 as the base year.
Utility of Free Trade Aggrement for India
NITI Aayog, in a report published in 2017 based on an analysis of free trade agreements (FTA) signed over the past decade, said that FTAs have not brought India the expected benefits.Neither Indian exports expect imports from the implementation of FTA There has been a rapid growth and neither has the trade deficit narrowed.
The share of FTA in India's total trade is only 11%while the trade deficit is 23%.Although India has also said that it will consider joining the RCEP if all its concerns are addressed, but India is not ready to join the current format of RCEP.
