Economy / Foreign Trade / Regional Comprehensive Economic Partnership (RCEP)
Regional Comprehensive Economic Partnership (RCEP)
- Background:
- Proposed free trade agreement (FTA) involving ASEAN member states and six Asia-Pacific states.
- Negotiations began in 2012.
- India dissociated from RCEP in 2019.
- Reasons for India's Disassociation:
- Trade deficit with 11 RCEP member nations.
- Significant trade deficit with China.
- Vulnerability of Indian agriculture to import surges.
- Concerns about unfavorable terms in services.
- Industries, including iron and steel, dairy, marine products, electronics, chemicals, pharmaceuticals, and textiles, feared loss of competitiveness.
- Fear of a flood of Chinese goods into India.
- India's stand on intellectual property rights aimed to not go beyond WTO standards.
- India's Strategy:
- Recognized the need to reform factor markets (land, labor, and capital) to enhance competitiveness.
- Focus on becoming a vibrant part of global value chains.
India's decision reflects a strategic approach to address domestic concerns and enhance overall competitiveness before committing to comprehensive trade agreements.
