MY ANALYSIS ON INDIA’S POSITION ON RCEP FREE TRADE AGREEMENT

The suspense with India’s participation in the proposed 16-member mega-trade deal, Regional
Comprehensive Economic Partnership (RCEP), the first trade bloc that groups large economies
of the developing world in Asia-Pacific, still continues despite many rounds of negotiations. It is
surprising for me to see India too confused on its stand despite the history of increase in deficit
whenever they sign a free trade agreement with any country whatsoever.

There had been various opinions regarding India’s stand on RCEP – FTA, one such positive
opinion of RCEP – FTA was given in The Hindu Business Line (7 January, 2019), Geethanjali
Nataraj and Garima Sahdev infer that the long-term benefits of joining the bloc far outweigh the
short-run costs. The authors state, “…if India wants its ‘Make in India’ to become a global
success, it must participate positively to become a part of the Asian value and supply chain
which either begins or ends in India”.1 Despite the various emerging opinions about it I believe
RCEP-FTA will be a disaster for India in the short-run as well as in the long run. The motive of
India to sign that agreement keeping in mind ‘Make In India’ initiative though an important
motive but actually would be a decision took in haste as the trade deficit would increase in an
unusual manner and India’s pocket would be burdened more than ever and Milk products from
Newzealand would kick India’s milk giant, Amul out of the park of corporate players as no
Indian company would be able to provide milk cheaper than what rate Newzealand will provide
for its milk products with lesser tariffs after India would have signed the FTA.

China has already made India a dumping ground for its products and the Indian consumers still
buy those Chinese products due to its cheapness, Indian manufacturers fail every time to give as
cheap products as of China’s thus increasing the trade deficit further. Make in India would not be
a success if India allows other countries to sell their products more than ever in their country as
people will start purchasing those products because of its cheapness and it would effect the Make
in India movement a lot because though the Indian manufacturers will produce but still their
products would start accumulating hampering the further production.

Therefore I think that RCEP-FTA agreement if signed would bring Indian economy to shudders
and will further hamper the growth of India. India is already going through an economic
slowdown and cannot afford such a deal to further ruin its already ruined state.

1
https://www.thehindubusinessline.com/opinion/rcep-india-must-stop-being-a-naysayer/article25933654.ece