India has decided not to join the Regional Comprehensive Economic Partnership (RCEP) agreement as its key concerns have not been addressed. Sources told ANI said that Prime Minister Narendra Modi stood firm as India's key concerns were not addressed.
Sources: India decides not to join Regional Comprehensive Economic Partnership (RCEP) agreement. PM stands firm as key concerns not addressed; there will be no compromise on core interests. RCEP agreement does not reflect its original intent. Outcome not fair or balanced. pic.twitter.com/o058sJZnOn
— ANI (@ANI) November 4, 2019
Sources said there will no compromise on the country's core interests and RCEP agreement does not reflect its original intent and the outcome is not fair or balanced. "India’s stand is a mixture of pragmatism,the urge to safeguard interests of poor and effort to give an advantage to India’s service sector," they said.
RCEP is a proposed free trade agreement (FTA) between the ten member states of ASEAN and six FTA partners.
In his speech at the RCEP Summit in Thailand, Modi said "India stands for greater regional integration as well as for freer trade and adherence to rule-based international order. India has been pro-actively,constructively and meaningfully engaged in the RCEP negotiations since its inception." He, however, held that that the RCEP agreement in its current form does not reflect the basic spirit of the RCEP.
Govt Sources: In speech at RCEP summit,PM Modi said 'thousands of yrs before RCEP was conceived,Indian traders,entrepreneurs&common people built abiding contacts with this region.For centuries,these contacts&ties made valuable contribution to our shared prosperity.'(file visuals) https://t.co/vE34zZOfrr pic.twitter.com/rsxbUDjm8Y
— ANI (@ANI) November 4, 2019
The prime minister also reportedly raised the unviability of Most Favoured Nation (MFN) obligations where India would be forced to give similar benefits to Regional Comprehensive Economic Partnership (RCEP) countries that it gave to others.
The key issues include — inadequate protection against import surge, insufficient differential with China, possible circumvention of rules of origin, the base year remaining as 2014 and no credible assurances on market access and non-tariff barriers.
Govt Sources: In his speech PM Modi said 'today, when we look around we see during 7 years of RCEP negotiations many things including global economic&trade scenarios have changed.We can't overlook these changes.Present RCEP Agreement doesnt fully reflect basic spirit of RCEP' https://t.co/l9raTSpaq2 pic.twitter.com/f9NXaKJaFM
— ANI (@ANI) November 4, 2019
Govt Sources: India also raised the unviability of Most favoured Nation(MFN) obligations where India would be forced to give similar benefits to Regional Comprehensive Economic Partnership (RCEP) countries that it gave to others. (file pic) pic.twitter.com/UcSzWQh4r9
— ANI (@ANI) November 4, 2019
The prime minister said earlier that India remains committed to a comprehensive and balanced outcome of RCEP negotiations and seeks balance across goods, services and investments and also within each pillar.
'Understand India's concerns'
Reacting to India's decision to not be part of RCEP, Pham Sanh Chau, Ambassador of Vietnam to India said, " We understand the concerns raised by India in terms of RCEP (Regional Comprehensive Economic Partnership) but we hope all the concerned parties will be able to sit down & address the differences in a satisfactory way. Vietnam will assume the chairmanship of Asean Summit in 2020 and we hope that under our chairmanship, we will be able to sign that important Free Trade Agreement (FTA)."
Amit Shah hails PM
Home minister Amit Shah, taking to Twitter, said India's decision not to sign the RCEP is a result of Prime Minister Narendra Modi's strong leadership and unflinching resolve to ensure national interest in all circumstances. He said the decision shall "ensure support to our farmers, MSMEs, dairy & manufacturing sector, pharmaceutical, steel & chemical industries."
Shah also slammed the previous UPA government:
PM @narendramodi’s firm stand over the years of not going ahead with a deal if our interests are not taken care off, is a welcome break from the past, where a weak UPA government ceded precious ground on trade and could not protect national interest.
— Amit Shah (@AmitShah) November 4, 2019
'Staying out will only isolate India'
According to a report in Livemint, Union minister Piyush Goyal earlier defended the agreement, saying India could not remain isolated in a globalised world. “If India remains out of RCEP, we will be left isolated from this large trading bloc. The trade among RCEP countries is about $2.8 trillion. If India sits outside RCEP, whether it is in our interest or against our interest, it is also the responsibility of the government to see. You will want us to engage to find solutions which is in national interest," Goyal said, speaking at an event in Nagpur. "... India cannot stop its engagements and trade with the rest of the world. We need to develop capability to prevent unnecessary influx of Chinese goods."
Opposition slams RCEP
The proposal had also drawn flak from the Opposition, with Congress interim president Sonia Gandhi saying that the agreement would deal a "body blow" to the economy. "As economic decisions have not damaged the economy enough, it is now ready to deal a body blow to it by signing the Regional Comprehensive Economic Partnership Agreement (RCEP) - the regional free trade agreement of 16 Asian countries," Sonia said. Quoting government sources, ANI reported that the Government of India during UPA opened 74 percent of its market to ASEAN countries but richer countries like Indonesia opened only 50 percent for India.
Government of India under UPA also agreed to explore an India-China FTA in 2007 and join RCEP negotiations with China in 2011-12. The domestic industry in India is still reeling under impact of these decisions, sources were quoted as saying by ANI. "Government under Modi has sought to solve these issues and negotiations are continuing. It is therefore evident that India could not sign a further unequal deal under RCEP without resolving past issues."
#WATCH Vijay Thakur Singh, Secretary (East),MEA: India conveyed its decision at the summit not to join RCEP (Regional Comprehensive Economic Partnership) Agreement. This reflects both our assessments of current global situation&of the fairness & balance of the agreement. pic.twitter.com/IAT6xiq02R — ANI (@ANI) November 4, 2019
Congress leader Rahul Gandhi too hit out at the RCEP and alleged that the proposed free trade deal will flood the country with cheap goods, resulting in millions of job losses and crippling the economy. "Make in India' has become Buy from China", he said.
"Make in 🇮🇳" has become “Buy from 🇨🇳”.
Each year we import Rs. 6,000/ worth of goods from 🇨🇳 for every Indian! A 100% increase since 2014. #RCEP will flood India with cheap goods, resulting in millions of job losses & crippling the 🇮🇳 economy. https://t.co/4DqzARiL6D
— Rahul Gandhi (@RahulGandhi) November 4, 2019
According to a source in the Prime Minister's Office, these are the 'pro-Indian industry' steps taken by the government so far:
- Korean FTA review started three years ago and is being fast tracked. India has already secured agreement in ASEAN for a review of the FTA.
- A Joint Working Group is discussing the issues to be addressed in Japan FTA on 18/11 and will also discuss review of FTA.
- Various industries especially farmers, small scale and handloom sector are benefitting from decisions taken on imports.
- Import of Agarbatti put from ‘Free category’ to ‘Restricted category’ which has given a boost to the domestic industry, especially small scale sector.
- Suitable safeguard duty of 5 percent imposed on palm oil to address import surge and protect the interest of the domestic industry.
- In order to safeguard the interest of local cashew planters, minimum import price of Cashew Kernel Broken from Rs 288 per kg to Rs 680 per kg and Cashew Kernel Whole from Rs 400 per kg to Rs 720 per kg.
- In order to ensure remunerative price to the farmers, import of peas and pulses has been restricted and import of only 4 lakh MT of Toor and 3 lakh MT of Moong and Urad has been allowed for the fiscal year 2019-20.
- In order to monitor the import of Steel, a Steel Imports Monitoring System (SIMS) has been launched. All stakeholders will have information about the imports of different steel products and it will enable timely policy interventions.
- In order to mitigate the shortages of maize (feed grade) for poultry and dairy farming, import of 5 lakh MT of feed-grade Maize has been allowed at lower 15% customs duty instead of normal customs duty of 50 percent. This will boost poultry production and dairy farming.
With inputs from ANI
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Updated Date: Nov 04, 2019 20:49:03 IST