Even as farmers across the country are all set to hold protests on Monday against India joining the Regional Comprehensive Economic Partnership (RCEP), the Confederation of Indian Industry (CII), one of India’s largest industry bodies, has said there are a number of benefits the country will get from the RCEP, including being part of a much larger supply chain and being able to increase its exports.
Prime Minister Narendra Modi, who is now in Bangkok, will make clear India’s stance on Monday on whether it will join the RCEP or not.
“Trade within RCEP nations is expected to increase once the agreement is signed,” the CII said in a report. “By being part of the block, India will get an opportunity to tap large and vibrant economies and increase its exports. Not being part of the block is tantamount to not having an even footing in terms of preferential access and losing export competitiveness. This will only harm India’s export and investment flow in the future.”
The report finds fault with RCEP opponents, saying that they focused too much on the harm that could arise out of a trade deal involving China and not enough on the opportunities for India.
Focus shifted
“Indian industry raised the alarm over RCEP without factoring into account the cost of not being part of RCEP,” it said. “Indian industry never looked towards RCEP as an opportunity to gain additional market access and to get integrated into a robust regional value chain.”
“Since 2012, the year in which RCEP negotiations were launched, this never became part of discourse — neither between industry and government nor among the industry members,” it added. “The entire narrative and consultations in India remained focused on defensive interests and protection against China.”
So far, the perception has been that India’s importance in trade arises out of its large market. However, the CII pointed out that as the RCEP progresses and favourable tariffs and Rules of Origin (ROOs) kick in, India could become a major hub for coordinating regional value chains through itself. That is, it could serve not only as a major market for final markets but also as a base for third-country exports, primarily to West Asia, Africa and Europe.
The All India Kisan Sangharsh Coordination Committee (AIKSCC), a coalition of over 250 farmer organisations in the country, and representing about 10 lakh farmers, said that it would be organising a protest on Monday against India’s potential inclusion in RCEP and its detrimental effect on the domestic agriculture sector.
So far, Indian authorities, including Mr. Modi, have been ambiguous about India’s future regarding the trade grouping.
In an interview to the Bangkok Post newspaper, Mr. Modi said that while India was committed to a “balanced outcome” from the RCEP negotiations, it had to keep its interests and the various trade deficits it had with the other member countries in mind while negotiating.
