Dropping out of RCEP protects Indian industry in the short run. But it serves our long-term interests | The Indian Express

Dropping out of RCEP protects Indian industry in the short run. But it serves our long-term interests | The Indian Express

Written by Naushad Forbes |Updated: November 14, 2019 10:11:12 am

The writer is co-chairman Forbes Marshall, former president CII, Chairman of Centre for Technology Innovation and Economic Research and Ananta Aspen Centre.

Dropping out of RCEP protects Indian industry in the short run. But it serves our long-term interests

Missing out on a market eight times the size of India’s is closing off to the world we will regret for decades. We need to get back in before February.

India has two alternatives. The first is to avoid trade agreements, raise tariffs (as we have done in nine rounds in the last three years), believe that our firms cannot compete with the best, and protect the economy from imports. (Illustration by C R Sasikumar)

The Regional Comprehensive Economic Partnership (RCEP) brings together the 10 countries of ASEAN in South East Asia, along with Japan, South Korea, Australia, New Zealand, China and until last week — India. These 16 countries account for over a third of world GDP and trade, and are collectively growing at a rate that is double the rest of the world. The Indian economy is large, but the rest of the RCEP is eight times its size. It is by far the most attractive market in the world today, and will be for the next 20 years. But, after protracted negotiations that began in 2012, India announced last week that it is not pursuing membership in the RCEP. The 15 remaining RCEP members are going ahead and have committed to signing an agreement early next year. They have kept the door open for India, and India has responded with a mixed message about “staying out” while being open to “offers” to join in.