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economy | IST

India opts out of RCEP: What will its impact on external trade and domestic industries? Here's what experts say

China and fourteen other Asia-Pacific countries have signed the world's largest trade agreement, the Regional Comprehensive Economic Partnership or RCEP. The signing of this agreement can be as big as signing of the NATO or signing of the European Union (EU). Ajit Ranade, Chief Economist at Aditya Birla Group, Jayant Dasgupta, Former Ambassador of India to the WTO, Michael G Plummer of the Johns Hopkins University and Kanwal Sibal, Former Foreign Secretary, discussed how big an event is this.

China and fourteen other Asia-Pacific countries have signed the world's largest trade agreement, the Regional Comprehensive Economic Partnership or RCEP. The signing of this agreement can be as big as signing of the NATO or signing of the European Union (EU). Ajit Ranade, Chief Economist at Aditya Birla Group, Jayant Dasgupta, Former Ambassador of India to the WTO, Michael G Plummer of the Johns Hopkins University and Kanwal Sibal, Former Foreign Secretary, discussed how big an event is this.
“I don’t think it would assume the proportions of the EU as it stands today because apart from trade barriers which have been removed, there is a lot of integration in other spheres including monitory union which is the ultimate,” said Dasgupta.
“China has already FTAs with everyone else in RCEP except for India and Japan. It is not going to gain very much from the RCEP except for increasing its economic footprint in all these countries,” Dasgupta added.
“There will be some structural change. Our estimates suggests that India in the RCEP would have a big boost in its service sector and to some degree in its advance manufacturers but it would have the industries would take a hit but not a large hit,” Plummer said.
“This is a trade agreement. It is only an incremental not very ambitious enlargement of what is the reality even otherwise. India already has a FTA with all 10 members of ASEAN, India has a very comprehensive FTA with Japan and South Korea and an agreement with Australia is in the works, so in that sense it is very incremental,” Ranade said.
“If the supply chains were to move out of China and go into regions and then you have RCEP then what is the big point in moving these supply chains away from China,” Sibal said.
For entire discussion, watch this video…