Why Modi Govt’s Decision to Opt Out of RCEP Betrays Its Weakness
Can not joining the RCEP be called a strong decision of the Modi government? The Quint’s Sanjay Pugalia explains.
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India has taken a big decision in the interest of the country’s domestic industries by pulling out of Regional Comprehensive Economic Partnership (RCEP) and refusing to be a part of the world's largest trade deal between 16 countries.
The negotiations for the proposed free-trade RCEP agreement included 10 member countries of the Association of Southeast Asian Nations (ASEAN) and six of the bloc’s dialogue partners – China, Japan, South Korea, India, Australia and New Zealand.
PM Modi made the announcement during his speech at the RCEP Summit in Bangkok, which was attended by several world leaders including Chinese leader Li Keqiang.
“The present form of the RCEP agreement does not fully reflect the basic spirit and the agreed guiding principles of the RCEP. It also does not address satisfactorily India’s outstanding issues and concerns. In such a situation, it is not possible for India to join RCEP Agreement.”Narendra Modi, Prime Minister
The debate over RCEP began seven years ago, during the UPA rule. India has finally decided to stay out of the RCEP agreement supporting China. Statistics show that due to other free trade agreements in the past, India has suffered a trade deficit.
During the UPA government, India agreed to explore the possibility of an India-China FTA in 2007 and to participate in RCEP negotiations with China in 2011-12. According to sources, the decision taken by the UPA led to an increase in India’s trade deficit with the countries of RCEP from $7 billion in 2004 to $78 billion in 2014.
Opposition parties, Swadeshi Jagran Manch and Indian Merchants’ Chamber earlier opposed the government over RCEP but later welcomed Modi government’s decision.
But, can the decision to not join the RCEP be called a strong one by the Modi government?
The Quint’s Editorial Director Sanjay Pugalia analyses Modi government’s decision to opt out of the RCEP agreement and explains why the decision is akin to a betrayal of its weakness.
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