After the government announced the decision to pull out of RCEP, commonly referred to as the world's largest free trade agreement, Arvind Panagariya, Former VC, NITI Aayog said that India should look to get back into the group.
After the Narendra Modi-led government announced the decision to pull out of RCEP (Regional Comprehensive Economic Partnership), commonly referred to as the world’s largest free trade agreement, Arvind Panagariya, Former VC, NITI Aayog said that India should look to get back into the group. “I remain firm in my belief that ultimately we have to join this group as there is a lot for us to gain from it, “Panagariya told in an interview to CNBC TV18. According to the expert, the move could be a very big catalyst to attract a lot of multinationals to its shores because it then gives them access to markets in India as well as in China. Notably, the 15 member countries in the RCEP include Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar, Cambodia, Japan, South Korea, Australia and New Zealand.
India pulled out of the agreement, as it felt that the deal would lead too a huge influx of imports from China. “The present form of the RCEP Agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP. It also does not address satisfactorily India’s outstanding issues and concerns. In such a situation, it is not possible for India to join the RCEP agreement,” Prime Minister Narendra Modi said at the recently concluded ASEAN Summit.
The key issues that prevented India from coming on board include inadequate protection against surges in imports, credible assurances on its demand for more market, and apprehensions on lowering and eliminating tariffs. Even if India has opted out of this FTA (free trade agreement), it should continue to work on such models, Madan Sabnavis, Chief Economist, CARE Ratings told Financial Express Online. “RCEP has the advantage of dealing with similar minded countries within proximity which is necessary to make them successful,” he added. The agreement may also involve opening doors for imports, it’s important to ensure that net deal is in favour of India, he said.