NEW DELHI: India will not join the world’s largest trading bloc — Regional Comprehensive Economic Partnership (RCEP), formally inaugurated last Sunday, till concerns over a possible surge in imports of manufactures and agricultural produce due duty cuts are addressed, said officials.
According to the officials, concerns over flooding of the market by cheap Chinese manufactures, textiles from Asean countries and dairy and agricultural produce from Australia, New Zealand need to be addressed. Added to this is a border row with China, which has spilled into the economic space with India banning Chinese apps and blocking Chinese investments. Officials added that they expected China would retaliate by blocking grant of concessions to India to address their concerns.
“We had suggested an early trigger mechanism which allows us to raise tariffs to protect domestic industry or farmers in case of a surge in specific imports. This would have addressed part of our concerns,” said officials. India also opposed rules of origin which said parts of a product from any member nation would be given equal treatment, which meant a mobile shipped from Vietnam with 60 per cent of its parts made in China would have to be given preferential tariff treatment.
India specifically fears a flooding of the local market by cheap Chinese electronics and other manufactures. Several Indian industries including textile, dairy and horticulture have also warned against
opening up their sectors. India’s trade deficit with the RCEP nations taken together is $105 billion, with the lion’s share being accounted for by China. According to official data, the deficit with China alone stood at nearly $49 billion in 2019-20.
According to Prof Biswajit Dhar of JNU and member of Board of Trade “Till issues with China and Chinese imports get resolved, I do not see India joining the RCEP, though Japan and Australia are trying hard to persuade us to join and balance China.” India is the only nation which walked out of talks to form the mega trading bloc which accounts for $26.2 trillion and 30 per cent of the global economy, though RCEP says doors remain open to the South Asian giant.