India chooses not to participate in RCEP, PM Modi says concerns are not addressed
NEW DELHI: India withdrew from the Regional Integral Economic Association (RCEP) on Monday, with PM Narendra Modi putting his foot on the ground and saying that the country's concerns were not addressed.
“Our farmers, merchants, professionals and industries have interests in such decisions. Equally important are workers and consumers, who make India a large market and the third largest economy in terms of purchasing power parity. When I measure the RCEP agreement regarding the interests of all Indians, I don't get a positive response. Therefore, neither the Gandhiji talisman nor my own conscience allows me to join RCEP, Modi said at the RCEP Summit in Thailand , seven years after negotiations began for the formation of what could have been the largest commercial block in the world.
The no of India means that the block will not come true. The result bothered China, its anger evident in the accusations in the state-controlled media that India made last-minute lawsuits, and other members of the proposed bloc that have been watching the Indian market.
This is the second time since 2014 that the government takes a firm stance on the problems of world trade. Shortly after taking over, the Modi administration had threatened to leave the Bali package of the WTO, which could have affected the country's food acquisition program. This time, the main concern was the threat that imports from China would flood the market.
Indian negotiators said the terms of the offer did not respond to their concern even though it was repeatedly marked. In addition, there were elements in the commercial package that could have affected the government's economic policy. For example, RCEP would have forced the government to reduce import tariffs on various goods, including mobile phones, to 2014 levels, which would affect Make in India. The Indian government could also lose around Rs 50,000-60,000 rupees if it had accepted the reduced tariffs.
“Today, when we look around, we see during seven years of RCEP negotiations, many things, including global economic and commercial scenarios, have changed. We cannot ignore these changes. The current form of the RCEP agreement does not fully reflect the basic spirit and agreed guiding principles of RCEP, ”said Modi.
It was also feared that weak rules could have allowed Chinese products to be routed through Vietnam or Thailand , while there was little to ensure that Beijing didn’t erect non-tariff barriers to block the entry of Indian medicines or rice. In their joint statement, the regional leaders acknowledged India’s concerns but kept the door open.
“All the participating countries of RCEP will work together to solve these pending problems in a mutually satisfactory way. India's final decision will depend on the satisfactory resolution of these problems, the statement said. The RCEP has always been an area of concern for industry and farmers in India, and policymakers were reluctant to join the negotiations during UPA-2. But as part of the Manmohan Singh government’s ‘Look East’ policy, India decided to join the talks, hoping it would take years for the deal to be thrashed out. In the process, it ended up annoying several countries, such as and Thailand , which wanted the agreement finalised without India as the Modi government too seemed to be pursuing a similar policy.