Why RCEP Is Seen as Detrimental to India’s Trade Interests
- Recently, BVR Subrahmayam, CEO of Niti Aayog, called for a review of India joining the Regional Comprehensive Economic Partnership (RCEP).
- GTRI emphasizes that China’s trade practices are often opaque.
- India already has free trade agreements with 13 of the 15 RCEP countries.
India and RCEP: A Critical Assessment
Recently, BVR Subrahmayam, CEO of Niti Aayog, called for a review of India joining the Regional Comprehensive Economic Partnership (RCEP). The Global Trade Research Initiative (GTRI) responded, rejecting the idea. GTRI argues that joining RCEP would primarily benefit China and would not significantly increase foreign direct investment (FDI) in India.
Concerns About Chinese Trade Practices
GTRI emphasizes that China’s trade practices are often opaque. Any benefits from RCEP, they suggest, would be minimal. India has a large trade deficit with China, making a bilateral free trade agreement (FTA) impractical. If India joins RCEP, Chinese goods could flood the Indian market through other member countries without delay.
Current Trade Agreements
India already has free trade agreements with 13 of the 15 RCEP countries. The only exceptions are China and New Zealand. Thus, RCEP might not provide India with substantial new export opportunities. In fact, exports to China have stagnated over the past five years.
Conclusion
GTRI’s findings suggest that India’s participation in RCEP could pose more challenges than benefits. The report calls for careful consideration of the potential impact on India’s economy, particularly regarding trade with China.