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India should join China-led RCEP, says Niti CEO
Nitaji Aayog official suggests India should join China-backed RCEP trade bloc,
B.V.R. Subrahmanyam advocates India joining RCEP and CPTPP.
India negotiated for six years to join RCEP.
In 2019, India backed out, citing concerns over a free trade agreement with China.
RCEP includes 10 ASEAN members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos, Vietnam).
It also includes six FTA partners: China, Japan, South Korea, Australia, New Zealand.
Subrahmanyam warns India’s high tariffs hinder global trade opportunities.
Subrahmanyam said India missed the China-plus-one opportunity.
Countries like Vietnam, Indonesia, Malaysia, Turkey, and Mexico have probably benefited more from ‘China plus one’ than India, he said.
India’s tariffs on industrial and farm goods have risen, criticized by the Niti CEO and trade liberalization advocates.
Comments follow the 2024 Economic Survey’s call for India’s integration into China’s supply chain.
Top officials, including Niti CEO Nirmala Sitharaman, emphasize trade sensitivities with neighboring countries.
Barring China India either has FTAs with almost all the other members of RCEP.
The Economic Cooperation and Trade Agreement with Australia is already operational.
In September the World Bank in its India Development Update has also recommended reconsidering joining RCEP, citing potential boosts in trade, investment, and GDP growth.
According to an analysis by Global Trade Research Initiative (GTRI) after signing RCEP China has walked away with all the gains vis-a-vis other partners.
ASEAN’s trade deficit with China has jumped from $ 135.6 billion in 2023 from $ 81.7 billion in 2020. Also, the trade deficit of major ASEAN countries Singapore, Thailand, Vietnam, Philippines has steadily increased.
Japan’s trade deficit with China has increased to $ 41.3 billion in 2023 from $22.5 billion in 2020. South Korea may face a trade deficit for the first time with China this year.
The World Bank said RCEP will increase China’s gains, with economic benefits disproportionately favoring China, validating India’s concerns about unfair competition, stated by the Niti CEO.
India was never part of the CPTTP negotiations which is a trade agreement between 12 countries including Japan, Malaysia, Vietnam, Australia, Singapore, Brunei, New Zealand, Canada, Mexico, Peru, and Chile.
The US , which was also part of the negotiations under President Barack Obama, withdrew in 2017 on the very first day in office of Donald Trump.
