India Pushes Ahead on Trade Deal, Despite Domestic Resistance

  • Representatives of 16 ASEAN and Asia-Pacific countries gathered in Bangkok, Thailand this week.
  • The Indian Ministry of Commerce issued a statement saying that India hopes to guarantee that it will not suddenly be attacked by the import frenzy within the framework of the above agreement.
  • One of the parties within Prime Minister Narendra Modi's National Democratic Alliance, opposed the signing of RCEP.

Despite domestic resistance, the Indian government is pressing forward in joining a free trade agreement with China. There are many people in India who are worried that cheap Chinese products will swallow domestic products within the framework of the proposed FTA.

The Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement (FTA) between the ten member states of the Association of Southeast Asian Nations (ASEAN) (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) and its six FTA partners (China, Japan, India, South Korea, Australia and New Zealand).

To conclude the negotiation of the Regional Comprehensive Economic Partnership Agreement (RCEP) before the end of this year, representatives of 16 ASEAN and Asia-Pacific countries gathered in Bangkok, Thailand this week. Indian Trade Minister Piyush Goyal also led the team. They will conduct direct bilateral negotiations with China, Japan, Australia, New Zealand, and Singapore.

The Indian Ministry of Commerce issued a statement saying that India hopes to guarantee that it will not suddenly be attacked by the import frenzy within the framework of the above agreement. The statement specifically mentioned that the negotiations aimed to resolve concerns about Chinese imports.

Goyal said that the negotiations were hosted by the Ministry of Finance and the Ministry of Industry. The main focus was on setting up a security mechanism including an automatic start-up to counter the sudden increase in imports from RCEP members.

A source familiar with the negotiation process said that India and other countries have reached a principled agreement on the establishment of a security mechanism, that is, once a contracting country’s products are suspected of dumping, India automatically initiates a tariff mechanism.

At present, Indian dairy farmers and other production industries are worried that once the country opens, China’s cheap imports will hit the Indian agricultural market. The country’s 1.3 billion people are basically dependent on domestic agricultural production.

The National Volunteer Organization, or National Patriotic Organization (RSS) is an Indian right-wing, Hindu nationalist, paramilitary volunteer organisation that is widely regarded as the parent organisation of the ruling party of India, the Bharatiya Janata Party.

One of the alliances within Prime Minister Narendra Modi’s BJP, the National Patriotic Organization (RSS), opposed the signing of the Regional Comprehensive Economic Partnership Agreement. The organization called for demonstrations across India against the deal this Friday, saying that in the context of the current global economic slowdown, any change in the tariff area could weaken domestic factories and agricultural production. On Friday, Chinese President Xi Jinping is scheduled to India to attend the second informal meeting of Chinese and Indian leaders for two days.

The party that supports RCEP believes that it is more advantageous for India to join the free trade zone than to stay outside. AK Gupta, director of the Agricultural and Sideline Products Export Bureau of the Ministry of Finance of India, believes that open-minded India will be more promising because Indian agriculture can join the global competition.

In addition to the 10 member countries of ASEAN, the RCEP agreement includes six countries in the Asia-Pacific region: China, India, Japan, South Korea, Australia, and New Zealand. On the issue of agricultural problems, critics in India also believe that cheap Chinese mobile phones, steel, industrial products, and toys will flood the Indian market.

The Indian government does not agree. In New Delhi’s view, joining the RCEP agreement means that India is involved in the global supply chain of high-end products, including electronics and industrial products. And more to join the international market, it can just make up for the downturn in the domestic market.

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Joyce Davis

My history goes back to 2002 and I  worked as a reporter, interviewer, news editor, copy editor, managing editor, newsletter founder, almanac profiler, and news radio broadcaster.

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