Planters concerned with RCEP

‘More tariff cuts will worsen trade deficit in plantation commodities’

November 02, 2019 10:40 pm | Updated 10:40 pm IST - Coimbatore

The United Planters’ Association of Southern India (UPASI) has said that plantation commodities should be kept out of the Regional Comprehensive Economic Partnership (RCEP), if India signs the agreement.

AL. Rm. Nagappan, president, UPASI, said in a statement that in 2018-2019, the trade deficit in plantation commodities was ₹5,716 crore with RCEP countries, though India had overall trade surplus in these commodities.

“This indicates that plantation commodities will be losing significantly if the RCEP agreement materialises,” he said. “We fear further reduction in tariff proposed can only worsen trade deficit in plantation commodities.”

Among these commodities, natural rubber and pepper have an overall trade deficit, irrespective of RCEP.

This is because natural rubber is classified as an industrial raw material and pepper imports have increased because of multiple bilateral and multilateral trade agreements. Coffee exports by India are high with more than 75% of production exported. However, with RCEP countries, there is a trade deficit to the tune of ₹16,435 crore.

“This suggests that the Indian coffee sector will be a loser. China is a partner country in the proposed RCEP. Though it is the largest producer of green tea, China makes black CTC tea, too, for the export market. We fear that the rules of origin criteria will be taken advantage of to route tea through the ASEAN countries who have a duty advantage,” he said.

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