The government on Monday said India will not join the Regional Comprehensive Economic Partnership (RCEP) deal, adding that it would adversely affect national interest.
This was a nod by the government to concerns raised by domestic industry and farmers, most of whom had opposed the pact, fearing it would lead to uncontrolled dumping by China.
“India conveyed its decision to not join… (There are) significant issues of core interest and the impact it would have on the livelihood of vulnerable sections. India has participated in good faith in the RCEP discussions and had negotiated hard with a clear-eyed view of our interests,” said Secretary (East) in the Ministry of External Affairs, Vijay Singh Thakur, in Bangkok.
She added not joining the pact was the right decision at the moment.
Fifteen other nations, however, went ahead with the deal after the conclusion of the summit in Bangkok, which was also attended by Prime Minister Narendra Modi.
“Participating countries have concluded text-based negotiations for all 20 chapters and essentially all their market access issues; and tasked legal scrubbing by them to commence for signing in 2020,” said the joint statement issued after a meeting of RCEP leaders.
Negotiations, started in 2012, will now culminate in a final deal being signed by 2020, it added.
The nations have also left the door open for India — the largest untapped consumer and industrial market — in the bloc.
“All RCEP countries will work together to resolve these outstanding issues in a mutually satisfactory way. India’s final decision will depend on satisfactory resolution of these issues,” the joint statement added.
Sources said Modi informed the other leaders that the deal in its current form “does not fully reflect the basic spirit and the agreed guiding principles of RCEP”.
“When we look around we see during seven years of RCEP negotiations, many things, including the global economic and trade scenarios have changed. We cannot overlook these changes. The present form of the RCEP agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP,” he said.
The ambitious pact will now cover the 10 Association of Southeast Asian Nations economies (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) and five others — New Zealand, Australia, China, Japan, and South Korea — with which the group has free-trade agreements (FTAs).
So far, 28 rounds of talks have concluded, apart from multiple minister-level meets as well as numerous technical rounds of talks.
Senior government sources said the decision may have been taken because of mounting pressure from domestic industry, which reached a fever pitch over the past six months amidst deepening economic slowdown.
India registered a trade deficit with as many as 11 RCEP member nations in 2018-19, with China topping the list.
“The widening trade deficit with China, widening to $53 billion in the last financial year prompted the government’s move to demand safeguards in the form of ‘import caps’ from China. However, Beijing’s refusal to allow such a mechanism hastened India’s exit from the pact,” a source said.
This was a nod by the government to concerns raised by domestic industry and farmers, most of whom had opposed the pact, fearing it would lead to uncontrolled dumping by China.
“India conveyed its decision to not join… (There are) significant issues of core interest and the impact it would have on the livelihood of vulnerable sections. India has participated in good faith in the RCEP discussions and had negotiated hard with a clear-eyed view of our interests,” said Secretary (East) in the Ministry of External Affairs, Vijay Singh Thakur, in Bangkok.
She added not joining the pact was the right decision at the moment.
Fifteen other nations, however, went ahead with the deal after the conclusion of the summit in Bangkok, which was also attended by Prime Minister Narendra Modi.
“Participating countries have concluded text-based negotiations for all 20 chapters and essentially all their market access issues; and tasked legal scrubbing by them to commence for signing in 2020,” said the joint statement issued after a meeting of RCEP leaders.
Negotiations, started in 2012, will now culminate in a final deal being signed by 2020, it added.
The nations have also left the door open for India — the largest untapped consumer and industrial market — in the bloc.
“All RCEP countries will work together to resolve these outstanding issues in a mutually satisfactory way. India’s final decision will depend on satisfactory resolution of these issues,” the joint statement added.
Sources said Modi informed the other leaders that the deal in its current form “does not fully reflect the basic spirit and the agreed guiding principles of RCEP”.
“When we look around we see during seven years of RCEP negotiations, many things, including the global economic and trade scenarios have changed. We cannot overlook these changes. The present form of the RCEP agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP,” he said.
The ambitious pact will now cover the 10 Association of Southeast Asian Nations economies (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) and five others — New Zealand, Australia, China, Japan, and South Korea — with which the group has free-trade agreements (FTAs).
So far, 28 rounds of talks have concluded, apart from multiple minister-level meets as well as numerous technical rounds of talks.
Senior government sources said the decision may have been taken because of mounting pressure from domestic industry, which reached a fever pitch over the past six months amidst deepening economic slowdown.
India registered a trade deficit with as many as 11 RCEP member nations in 2018-19, with China topping the list.
“The widening trade deficit with China, widening to $53 billion in the last financial year prompted the government’s move to demand safeguards in the form of ‘import caps’ from China. However, Beijing’s refusal to allow such a mechanism hastened India’s exit from the pact,” a source said.
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