India has decided not to join the regional comprehensive economic partnership (RCEP) which is being dubbed as the world's largest free trade agreement. Prime Minister Narendra Modi has conveyed India’s decision to RCEP head of states. India’s main concern among others is that the deal can lead to a potential flood of Chinese imports in the country. India's worry is that this, in turn, will worsen its trade deficit with China.
Prime Minister Narendra Mode at the ASEAN Summit said, “The present form of the RCEP Agreement does not fully reflect the basic spirit and the agreed guiding principles of 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 the RCEP agreement."
Arvind Panagariya, Former VC, NITI Aayog in a conversation with CNBC-TV18, said that if the decision was a part of a bargaining strategy, then that is good and we ought to bargain hard.
“Whatever I have read in the press, it appears that there are a number of things which have not yet been addressed. So, if that is how it is and we eventually join RCEP it is a good thing because we will join with better terms but if the eventual outcome is we chose not to join RCEP at all then that is not a good outcome.”
“I remain firm in my belief that ultimately we have to join this group as there is a lot for us to gain from it, “said Panagariya in the interview.
“From India’s point of view this agreement can be a very big catalyst to attract a lot of multinationals to its shores because it then gives them access to markets in India as well as in China,” added Panagariya.
According to Anil Wadhwa, former secretary-east, MEA, one has to look at the overall agreement before making a decision.
“We never actually would have joined an agreement which did not fulfill our basic requirements and if these are core concerns as have been clearly brought out, then obviously we have to take that into account and especially as the Prime Minister said that if the agreement is going to affect the lives and livelihood of all Indians, especially the vulnerable sections of the society then obviously that is our priority and we have got to give priority to this," he added.
The other 15 RCEP member countries are Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar, Cambodia, Japan, South Korea, Australia and New Zealand