India opposes rejoining RCEP over China concerns

As the deadline for a response to a fresh proposal of India rejoining negotiations on the ASEAN-led trade Regional Comprehensive Economic Partnership (RCEP) ran out on Friday, a senior Ministry of External Affairs (MEA) official indicated that global post Coronavirus concerns over China had strengthened India’s opposition to the grouping. “If anything the COVID-19 experience, and therefore the experience of nations that are overly hooked in to imports from China or one country would have reinforced and revalidated the choice to remain out of RCEP,” said Ashok Malik, policy advisor within the MEA. The letter sent by the RCEP’s Trade Negotiating Committee (TNC) Chairperson last month, had a suggestion to reconsider India’s objections to giving market access for a “limited number of products”, if India would rejoin the talks. Prime Minister Narendra Modi had announced India’s decision to quit the grouping, which incorporates the ten ASEAN nations, Australia, China, Japan, New Zealand and South Korea in November, citing lack of protection for India’s agricultural and other sectors. After coitus interruptus of the grouping, India skipped a minimum of two separate meetings it had been invited to, including one in Bali in February, and a virtual RCEP meeting in April. At the RCEP-TNC meeting in April, negotiators who ironed out legal issues with the pact committed to signing the agreement by 2020 end. “The RCEP will provide a more stable and predictable economic environment to support the much-needed recovery of trade and investment within the region, which has been adversely suffering from the COVID-19 pandemic,” said a press release issued on April 30, which added that “Against this backdrop, the 15 [countries] reaffirmed their commitment to continue working with India to deal with its outstanding issues…[and] would welcome India’s return to the RCEP negotiations.” ‘Make in India’ policy However, Mr. Malik said India’s experience of trade pacts within the past was that that they had “hollowed out” manufacturing within the country, and would hamper the government’s renewed commitment to the ‘Make in India’ policy. “At a time when our ‘Make in India’ programme is moving from Level 1 to Level 2, and it's to travel to Level 10, i feel it had been an honest decision [to leave RCEP],” he said, speaking at an internet seminar organised by the Carnegie India Foundation. Significantly, Australian High Commissioner-Designate Barry O’Farrell cited the ‘Make in India’ policy because the reason for India to hitch . Australia and Japan are at the forefront of efforts to convince India to rejoin the RCEP as a possible counterweight to China within the grouping that might represent a 3rd of worldwide trade. “If India did want to rejoin the [RCEP] negotiations, there would be no better time than now, because it might send a sign to the planet that not only is India a beautiful place to take a position , but also, its potential of being a worldwide manufacturing hub as envisaged by the government’s ‘Make in India’ policy was realisable” Mr. O’Farrell said at another webinar organised by the Observer Research Foundation. According to a trade expert, India could also use the RCEP to get “optimism” amongst Indian companies, given the uncertainty over demand and consumption thanks to the pandemic. “Right now, businesses have little or no to seem forward to, and a serious trade area just like the RCEP would be an honest lodestar for them to revive optimism. Given the backlash against the U.S., China also will look far more to the [Asian] region for trade, and there'll be opportunities for India also ,” suggested Santosh Pai, partner at Law Link who is an honorary fellow at the Institute of Chinese Studies. However, indications remain that the govt isn't keen to revisit the RCEP grouping at the present . Despite repeated attempts, neither the Commerce and Industries Ministry (CIM) nor the MEA agreed to discuss what India’s response to the letter sent by the RCEP negotiators was, or maybe whether it had been skilled by May 15, because the letter requested.

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