The regional comprehensive Economic Partnership (RCEP) is a proposed Tree Trade Agreement between ASIAN and its 6 Free Trade Partners viz. India, China, Japan, South Korea, Australia and New Zealand. RCEP accounts for 25% of world GDP, 30% of global trade and 45% of the world population.
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How RCEP can be a game-changer for India.
- Free trade in goods, services, investments.
- Enhance people – to – people ties more diaspora.
- Huge – market for Indian exports.
- A game-changer for India’s services sector.
- More FDI (Foreign Direct Investment) in India.
- Technology transfer.
- Will increase case of doing business.
Concerns of India.
- The huge Trade deficit of 100 billion dollars with RCEP: -an account for India’s 64% total trade deficit out of this 60% is with China.
- India already has FTA with South Korea, Japan.
- China will floe the market of India.
- Harm to domestic industries of India.
- Non- Traffic barriers imposed by China
- Tax rules of origin – It signifies the origin of the product. India wants 30-40% of value-added; to protect domestic industries.
Way forward:
- Safeguard provision to be incorporated in RCEP, so that when price or volume triggers, the country can put tariff.
- The tariff should be eliminated in a phased manner not abruptly, because of the huge trade deficit with China.
Hence, RCEP offers huge advantages to India. India must negotiate with all countries involving in RECP to take an edge over services Sector. Out rigidly rejecting the proposal would not be beneficial. India must rethink over this issue.