New Delhi: In a clear indication of India’s intentions ahead of the final ministerial meeting of the Regional Comprehensive Economic Partnership (RCEP) grouping on Saturday, trade minister Piyush Goyal on Thursday defended the free trade agreement among the 16 economies, holding that India cannot remain isolated in a globalized world.
Prime Minister Narendra Modi held a meeting with his senior Cabinet colleagues on Monday evening which lasted for four hours to decide India’s final stand on the trade agreement. “The direction given is to negotiate hard to protect India’s interests. The negotiations are likely to go down to the wire," a senior government official said on the condition of anonymity.
“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.
He, however, assured that the government will not allow the country to be flooded with cheap Chinese goods as a result of the RCEP agreement. “We are not going to open any gate that will allow Chinese goods to flood Indian markets. But we also appreciate that the way the world is rapidly globalizing and inter-dependencies are being created. In such a scenario, standing outside the room will not benefit us. 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," he added.
India has proposed to put in place an auto-trigger mechanism to appropriately safeguard any sudden surge in imports from RCEP countries, especially China with which it has a $53.6 billion trade deficit. However, most analysts believe the volume-based auto-triggers on 100-200 items is unlikely to safeguard the country against a sudden surge in imports from RCEP members.
Goyal is scheduled to attend the ministerial meeting to be held on 11-12 October in Bangkok. “This will be the last ministerial before the 3rd Leaders Summit to be held on November 4th 2019 in Bangkok. The Prime Minister of India is expected to attend the Summit. The 9th Intersessional Ministerial Meeting comes at a crucial stage where the RCEP is scheduled to be announced as concluded in November 2019," a statement from the commerce ministry said on Thursday ahead of the meeting.
Till the 28th round of RCEP negotiations at the expert level held at Da Nang, Vietnam last month, 21 out of 25 chapters have been concluded. “Crucial chapters of investment, electronic commerce, rules of origin and trade remedies are yet to be settled," the statement added.
Coinciding with the RCEP meeting, PM Modi is also hosting Chinese President Xi Jinping for an informal summit at Mamallapuram, Tamil Nadu on 11-12 October where the two leaders may discuss bilateral trade issues including RCEP.
Forum For Trade Justice, a non-profit organization in a statement, said India is going through a major economic slowdown and going ahead with RCEP will only aggravate the crisis.
“Across manufacturing sectors, be it automobile, steel, electrical and electronics, garment, textiles and leather industries hundreds and thousands of workers are being retrenched. It is very worrisome that since the RCEP negotiations were launched in 2012, this is the first time that India seems to be closest to signing RCEP despite continued lack of consultation with ordinary people," the statement added.