New Delhi: Prime Minister Narendra Modi said on Monday that India will not join the mega Regional Comprehensive Economic Partnership (RCEP) deal as negotiations failed to satisfactorily address New Delhi's "outstanding issues and concerns".
Apart from India, 10 ASEAN nations, China, South Korea, Japan, Australia and New Zealand have signed the agreement after six years of strenuous negotiations on Monday.
Speaking to ETV Bharat, Economist Akash Jindal hailed the government of India's decision claiming that in the coming years, India needs to protect its farmers, industries and MSMEs.
"We need to protect our agriculture, farm and dairy output and we need to boost Make in India," Jindal said terming the decision as the right one.
"Terms of RCEP had provisions where countries like China could push its products with less/no duties to India," he added.
Also read: RCEP: India's concerns about the mega trade deal
Farmers' Union had been voicing their opinion against the RCEP. They claim that if India becomes a member of the mega trade deal then dairy farmers will be the most affected. According to them, countries like New Zealand and Australian surplus dairy products and farmers fear that they can flood Indian markets with their cheaper products, which will affect nearly 100 million people associated with the dairy sector.
India has been forcefully raising the issue of market access as well as protected lists of goods mainly to shield its domestic market as there have been fears that the country may be flooded with cheap Chinese agricultural and industrial products once it signs the deal.
India's exports are worth USD 300 billion and imports are USD 461.2 billion. Total trade was USD 761 billion but the deficit was USD 161.4 billion. India's trade deficit with RCEP countries is USD 105 billion.
Also read: RCEP: pros and cons of trade agreements for India
RCEP deal is also likely to have a significant impact on oilseeds and oil palm production domestically. India spent over Rs 46,000 crore on import of palm oil in 2017–18. Palm oil production costs are low in Indonesia and Malaysia. By reducing import tariffs by 0 to 3%, more palm oil will emerge from these countries.
The RCEP negotiations were launched by ASEAN leaders and six other countries during the 21st ASEAN Summit in Phnom Penh in November 2012. The objective of launching RCEP negotiations was to achieve a modern, comprehensive, high-quality, and mutually beneficial economic partnership agreement among the ASEAN member States and its FTA partners.
On Saturday, the trade ministers from 16 RCEP countries failed to resolve the outstanding issues identified by India through back-channel talks continued on the sidelines of the ASEAN summit to resolve the sticky issues.
With India increasingly focusing on the service sector, If we consider the cost and size of production of the respective countries, the benefits of manufacturing-related deals may not benefit. In addition, India already has free trade agreements with Asian countries as well as South Korea and Japan.
