India holds its ground

Firm stand on RCEP is in national interest

INDIA has taken a pragmatic decision by refusing to join the Regional Comprehensive Economic Partnership (RCEP), a China-backed ‘free trade’ deal endorsed by the 10 ASEAN nations, besides Japan, South Korea, Australia and New Zealand. At a time when the country’s economy is in a tailspin, industrial growth is declining and the agrarian sector is sinking deeper in distress, committing itself to this treaty would have been politically as well as economically injudicious, if not suicidal, for the government. India has also boldly stated that it is ready to plough a lonely furrow rather than compromise on its interests. The fears that the RCEP could open the floodgates for an invasion of Indian markets by cheap Chinese goods can’t be overstated. India has over $105-billion trade deficit with the member nations negotiating the agreement, including more than half ($54 billion) with China alone. A pact with no provision to reduce or remove this wide disparity would have become a millstone around India’s neck.

With its tough stand, India has again demonstrated its growing assertiveness in the international arena. Earlier this year, External Affairs Minister S Jaishankar had unequivocally told US Secretary of State Mike Pompeo that India would go by its national interest on the S-400 missile defence deal with sanctions-hit Russia. India had sealed that pact last year despite US warnings on imposing trade curbs under CAATSA (Countering America’s Adversaries Through Sanctions Act).

The first round has been won. The victory will be comprehensive if China and other nations agree to revisit the treaty to factor in India’s demands, including a level playing field for all stakeholders, safeguards against import surges, protection of interests of the domestic industry and assurance on market access and non-tariff barriers. India is too important a global player to be kept out of the scheme of things for long. On the home front, the ruling party has managed to pacify farmers, traders and industry in one fell swoop. The below-par show in the Maharashtra and Haryana Assembly elections has made it clear to the BJP that it can antagonise such vote banks only at its own peril.

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