Though India has its share of concerns in joining Regional Comprehensive Economic Partnership, long-term benefits of joining the bloc overshadow the short-run costs. Critically Analyze (200 Words )
Refer - Business Line
IAS Parliament 6 years
KEY POINTS
The RCEP initiative linking ASEAN and the group’s FTA partners is the largest FTA negotiation in Asia, and the biggest FTA negotiation that India has ever participated in. If negotiated successfully, it would create the world’s largest trading bloc.
India’s Share of concerns
· The Indian resistance can be traced to the disappointing outcomes of earlier FTAs with Singapore, Malaysia, Japan and Korea.
· Indian industry accuses these FTAs of largely increasing imports into India from regional markets. According to Ministry of Commerce, India runs a trade deficit with 10 of the 16 RCEP countries at a whopping $104 billion — 64 per cent of India’s total trade deficit in 2017-18. This deficit has reportedly been growing in the past few years.
· It is also true that large cross-border businesses like automobiles have set up assembly bases in India and are extensively importing parts and components from the region, affecting the economic interests of India.
· India also faces a problem in liberalising its labour-intensive agriculture sector which, like the pharmaceutical sector, risks monopolisation. New Zealand’s exported dairy products may rule the Indian dairy market which will demolish the growth of the domestic sector.
Long-term benefits for India
· It recognises the importance of being inclusive, especially to enable SMEs (Small medium enterprise) leverage on the agreement and cope with challenges arising from globalisation and trade liberalisation.
· SMEs (including micro-enterprises) make up more than 90 per cent of business establishments across all RCEP participating countries and are important to every member’s endogenous development of their respective economy including India
· If India wants its ‘Make in India’ to become a global success it must participate positively to become a part of the Asian Value and Supply chain which either begins or ends in India.
· RCEP can substantially increase investment in India from countries like Japan, South Korea. India reportedly saw a cumulative FDI inflow of $18.9 from Japan and $1.67 billion from South Korea in 2017.
· In an interconnected world, it is impractical to take an isolationist approach and spurn multilateral and regional trade pacts without risking trade diversion and loss of competitiveness in exports.
· To make RCEP a success, what is most required is de-emphasising the political element to make it more about economic integration.
Sandeep 6 years
Kindly review mine
IAS Parliament 6 years
Good
answer. Keep Writing.
Rahul 6 years
Pls Review mine
IAS Parliament 6 years
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attempt. Keep Writing.
Nandadeep 6 years
Kindly review.thanks
IAS Parliament 6 years
Good answer. Keep Writing.
