NEW DELHI: India stayed out of the China-backed Regional Comprehensive Economic Partnership (RCEP), signed last Sunday after eight years of negotiations, maintaining its national interests would be compromised. However, trade and political experts feel that the sooner New Delhi agrees to join the RCEP, the better it would be for the country.
“If we want our industry to be competitive, we have to join it sooner or later, and the sooner, the better. It will force us to undertake economic restructuring and pave ways for developing niche areas on the one hand and attract investment in those areas on the other. If not, the existing gap as well as trade deficit with RCEP countries will continue to grow. India would be at a very disadvantageous position,” said BR Deepak, Sinologist and chairperson of the Institute of Chinese and South Asian Studies at JNU, said.
India has contended that the free trade agreement will lead to flooding of Indian markets with cheap Chinese goods and thus have a negative impact on the market.India has been accorded an observer status in the grouping and the member states have given New Delhi an option to join the deal whenever it deems fit.However, Deepak feels that in the past too, protectionist policies have harmed our interests.
“The years between 1964 and 1984 had been disastrous for Indian economy. It resuscitated gradually when we tried to open up to the world and picked up very well in the 1990s gradually, taking the flight between early 2000s and 2014 when we tried to do away with the licence raj and integrated our economy with the global economy,” he said.
A former ambassador, who did not wish to be named, said the trade deficit with China and other RCEP countries is not bad for India as the consumers are the biggest beneficiaries of the FTAs. “It provides an opportunity for certain sectors to be competitive and establish themselves as global brands,” he said.
Deepak, too, was of the opinion that the possibility of inking the Trans-Pacific Partnership with the US would balance the exclusion from the RCEP. “But at this moment it is totally hypothetical. A bird in hand is always better than two in the bush as the saying goes,” Deepak said.