India's decision to leave RCEP is mistake, should join trading bloc 'as soon as possible', says Montek Singh Alhuwalia
Addressing a virtual event organised by the Centre for Social and Economic Progress, the former chairperson of the Planning Commission added that India isn't going to be part of the global supply chain if it keeps increasing tariffs
New Delhi: Terming India's decision to pull out of the Regional Comprehensive Economic Partnership (RCEP) as a 'mistake', former deputy chairman of the now-defunct Planning Commission Montek Singh Ahluwalia on Thursday said the country should join the trading bloc 'as soon as possible'.
Addressing a virtual event organised by the Centre for Social and Economic Progress, Ahluwalia further said India is not going to be part of the global supply chain if the country keeps increasing tariffs.
"Why have we walked out of the RCEP? We have been negotiating it for some time...To my mind, it is a mistake, RCEP allowed a very long adjustment period," he said.
Ahluwalia blamed substantial lobbying by small and inefficient industries for India's decision to pull out of the RCEP.
"This is only the result of substantial lobbying by small and inefficient industries ... We should join RCEP as soon as possible," he asserted.
The eminent economist also pointed out that before 1991, India's policies were described as protectionist.
"We went down the trade liberalisation route and did well. India grew rapidly after 1991. We did very well in terms of growth, we also did very well in reducing poverty," he said.
"Somewhat we appear to be stepping back, in the last 3-4 years, there have been increases in tariffs," he added. Ahluwalia noted that India failed to create high quality jobs in manufacturing.
The RCEP deal signed in November comprised 10 member countries of the Association of Southeast Asian Nations (ASEAN) and five of the bloc's dialogue partners — China, Japan, South Korea, Australia and New Zealand.
India, one of the leading consumer-driven market in the region, pulled out of talks last year, concerned that the elimination of tariffs would open its markets to a flood of imports that could harm local producers.
The RCEP was first proposed in 2012 and loops in 10 ASEAN economies- Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia- along with China, Japan, South Korea, New Zealand and Australia.
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