Prime Minister Narendra Modi said, on Monday, 4 November, that India will not join China-backed mega Regional Comprehensive Economic Partnership (RCEP) deal as negotiations failed to satisfactorily address New Delhi's “outstanding issues and concerns.”
Finance Minister Nirmala Sitharaman on Tuesday, talking to The Indian Express, said that “many of our core concerns were not met… we haven’t got what we wanted.”
PM Modi made the announcement during his speech at the RCEP Summit in Bangkok, which was attended by several world leaders including Chinese leader Li Keqiang.
“The present form of the RCEP Agreement does not fully reflect the basic spirit and the agreed guiding principles of the RCEP. It also does not address satisfactorily India's outstanding issues and concerns. In such a situation, it is not possible for India to join RCEP Agreement,” stated PM Modi.
Why China Was Pushing for the RCEP Deal
Sources said that China was forcefully pushing for the deal to be inked during the RCEP Summit in an attempt to counter-balance the impact of its lingering trade war with the US as well as to project the region's economic might to the West, according to PTI.
The key issues, as reported by ANI, include inadequate protection against import surges from China, insufficient differential with China, possible circumvention of rules of origin, keeping the base year as 2014, and no credible assurances on market access and non-tariff barriers.
India has been raising the issue of market access as well as protected lists of goods forcefully, 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.
What PM Modi Said
Prime Minister Narendra Modi, while announcing the decision, emphasised that “India stands for greater regional integration” and that India has been “proactively, constructively and meaningfully engaged in the RCEP negotiations since inception.”
“Today, when we look around, we see that during the seven years of RCEP negotiations, many things, including the global economic and trade scenarios have changed. We cannot overlook these changes,” he added.
He further said, “When I measure the RCEP Agreement with respect to the interests of all Indians, I do not get a positive answer. Therefore, neither the Talisman of Gandhi, nor my own conscience permit me to join RCEP.”
Secretary (East) in the Ministry of External Affairs Vijay Thakur Singh said, “India conveyed its decision at the summit not to join the RCEP Agreement. This reflects both our assessment of the current global situation as well as fairness and balance of the agreement. India had significant issues of core interests that remained unresolved,” reported ANI.
What Is RCEP Trade Bloc About?
The negotiations for the proposed free-trade RCEP agreement included 10 member countries of the Association of Southeast Asian Nations (ASEAN) and six of the bloc's dialogue partners – China, Japan, South Korea, India, Australia and New Zealand.
Sources said that except India, all 15 RCEP member countries were on board in finalising the deal at Monday’s summit.
The RCEP negotiations were launched by ASEAN leaders and six other countries during the 21st ASEAN Summit in Phnom Penh, Combodia 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.
If finalised, the RCEP would have become the world's largest free trade area, comprising half of the world population and accounting for nearly 40 percent of the global commerce and 35 percent of the GDP.
‘RCEP Against India's Economic Interest’
The RCEP agreement was against India's economic interest and national priorities, Commerce and Industry Minister Piyush Goyal said on Monday, 4 November, PTI reported.
He said that India has consistently stood its ground to uphold its demands particularly over the trade deficit, stronger protection against unfair imports and better market opportunities for domestic goods.
Home Minister Amit Shah said India's decision not to sign the RCEP reflects Prime Minister Narendra Modi's strong leadership and unflinching resolve to protect the national interest in all circumstances.
In a series of tweets, Shah said the decision will ensure support to India's farmers, MSME sector, dairy and manufacturing sectors, among others.
Slamming the RCEP, Sonia Gandhi had said on Saturday the agreement would deal a "body blow" to the economy, resulting in "untold hardship" for farmers, shopkeepers and small enterprises.
Talking to The Indian Express Finance Minister Nirmala Sitharaman said on Tuesday, “Many of our core concerns were not met… we haven’t got what we wanted”.
“We’d love to continue and have our concerns addressed. I’m satisfied that partner countries said they’ll address our concerns. We’re not shutting our doors or looking inwards.. we are actively engaging with global trading communities,” she added.
She had earlier said in a tweet that “significant outstanding issues remain unresolved” at the RCEP, calling the decision to opt-out “a clear and decisive call in India’s interest”.
(With inputs from PTI, ANI and The Indian Express)
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