After seven years of negotiations, India has backed out of joining the Regional Comprehensive Economic Partnership, a Free Trade Area that was to include 16 countries-the 10 member countries of the Association of Southeast Asian Nations as well as China, Japan, Korea, Australia, New Zealand, and India.
3 In theory, India could bargain for better entry conditions in the next six months and join RCEP when it is launched in 2020.
India has a big market, and other Asian countries are anxious for it to join.
Doing a U‑turn now, within months of opting out, looks politically unfeasible, given the strong opposition from many political parties and lobbies that claim Indian industry and agriculture would be killed by cheap imports if it joins RCEP. A more gradual approach would be for India to spend the next five years carrying out reforms to make itself more competitive and then join RCEP. India has the highest import tariffs among potential RCEP members and should prune these within the next few years so that it could enter RCEP without any serious disruption.
President Trump has called India a "Tariff king,"6 withdrawn duty‐free entry for $6.3 billion worth of Indian exports under the Generalized System of Preferences, imposed tariffs on Indian steel and aluminum, cracked down on H‑1B visas used by Indian software engineers, and taken India to the World Trade Organization for unfair export subsidies.
Not a single prominent constituency in India supports RCEP. Opposition parties, farmers groups, trade unions, and the Confederation of Indian Industry say no.
One reason given was that India had entered into FTAs with other countries and that in every case, India's trade deficit with those countries had widened.
https://www.cato.org/publications/economic-development-bulletin/india-should-join-asias-new-freetrade-area
3 In theory, India could bargain for better entry conditions in the next six months and join RCEP when it is launched in 2020.
India has a big market, and other Asian countries are anxious for it to join.
Doing a U‑turn now, within months of opting out, looks politically unfeasible, given the strong opposition from many political parties and lobbies that claim Indian industry and agriculture would be killed by cheap imports if it joins RCEP. A more gradual approach would be for India to spend the next five years carrying out reforms to make itself more competitive and then join RCEP. India has the highest import tariffs among potential RCEP members and should prune these within the next few years so that it could enter RCEP without any serious disruption.
President Trump has called India a "Tariff king,"6 withdrawn duty‐free entry for $6.3 billion worth of Indian exports under the Generalized System of Preferences, imposed tariffs on Indian steel and aluminum, cracked down on H‑1B visas used by Indian software engineers, and taken India to the World Trade Organization for unfair export subsidies.
Not a single prominent constituency in India supports RCEP. Opposition parties, farmers groups, trade unions, and the Confederation of Indian Industry say no.
One reason given was that India had entered into FTAs with other countries and that in every case, India's trade deficit with those countries had widened.
https://www.cato.org/publications/economic-development-bulletin/india-should-join-asias-new-freetrade-area
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