India Giving RCEP Free Trade Pact A Needful Second Look


(MENAFN- Asia Times) “India should be a part of RCEP and CPTPP,” according to B V R Subrahmanyam, CEO of the National Institution for Transforming India (NITI) Aayog, the Indian government's top public policy think tank and nodal agency for catalyzing economic development.

Speaking recently to the Associated Chambers of Commerce and industry of India (Assocham), Subrahmanyam said inclusion in the Asia-centric trade blocs“...will be best for India's micro, small & medium enterprises sector...40% of India's exports are from MSMEs. Big corporates are not great exporters.”

The NITI Aayog CEO also suggested that high tariffs have prevented India from taking full advantage of the rising diversification of supply chains away from China.“I don't think we have captured the 'China plus one' opportunity as much as we could have,” he added.

The Indian government was involved in the negotiations that eventually birthed RCEP, a 15-member Asia-Pacific free trade agreement that is the world's largest in terms of GDP. However, it decided against joining on the belief it would put Indian business and agriculture at a net-net disadvantage.

But views in New Delhi are apparently shifting as the global trade environment enters an uncertain new era.

India's early involvement in forming RCEP, which took force in January 2022, gives the lie to widely held notions the bloc is, at its core, a China-led initiative aimed at rewriting the rules of international trade to Beijing's advantage.

In actuality, RCEP originated in August 2011 at the ASEAN+3 (China, Japan, South Korea) conference, which adopted a joint Japanese-Chinese proposal known as the“Initiative on Speeding up the Establishment of an East Asia Free Trade Area (EAFTA) and Comprehensive Economic Partnership in East Asia (CEPEA).”

All of the Asia-Pacific democracies were involved in the long process of RCEP's development, and all, barring India, signed it on November 15, 2020. The RCEP includes Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Philippines, South Korea, Singapore, Thailand and Vietnam

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Asia Times

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