RCEP Trade Deal: Indian farmers and businesses have welcomed Prime Minister Narendra Modi’s decision to opt-out of a tempting RCEP Trade Deal with the country’s largest dairy producer Amul appreciating the leader for “supporting livelihoods.”
India’s last-minute rejection of the Regional Comprehensive Economic Partnership (RCEP) — which was intended to account for nearly 30 per cent of global GDP and loop in half the world’s population — comes as India struggles with decreasing manufacturing and consumption.
The RCEP trade deal would have improved India’s access to other Asian markets, but New Delhi apprehended its domestic companies would be hit hard if the country was overwhelmed with inexpensive goods from China.
In a tweet late Monday, Amul applauded Modi’s “exemplary leadership and support” to dairy farmers, who would have been exposed to more competition under the RCEP.
“Your vision of supporting their livelihood will help to double their incomes and make India stronger,” it said.
Praveen Khandelwal, secretary-general of the leading lobby group, Confederation of All India Traders (CAIT), released a statement warning the deal would have allowed Chinese manufacturers to overwhelm “the Indian market with Made In China products at very low prices … thereby creating a disequilibrium.”
B. M. Singh, convenor of the All India Kisan Sangharsh Coordination Committee, said the rejection of the deal was “a huge victory for farmers.” “We should not go for an open agreement like the RCEP simply because we can’t compete with other big countries,” Singh said.
“It’s like throwing someone who is 25 kilograms into a boxing ring and asking him to compete with an opponent weighing 100 kilograms.”
But experts warned that New Delhi, which has a long history of protectionism, may lose out as it tries to become a more globally competitive economy.
“In an era in which manufacturing requires the ability to become more — not less — integrated into global supply chains, this decision appears for the moment to make it harder to boost manufacturing in India,” the Council on Foreign Relations senior fellow Alyssa Ayres wrote.
“The central issue for the Indian government isn’t in the wording of a trade deal, but in the competitiveness of the Indian economy,” Ayres added in a blog post underlining the need for New Delhi to undertake further reforms to kickstart growth.
India’s decision is nonetheless seen as a blow to the RCEP trade deal, which includes all 10 Association of Southeast Asian Nations states besides China, Japan, South Korea, Australia and New Zealand.