New Delhi is unlikely to join the major free-trade agreement that unites 15 regional economies led by China and Japan. The world’s fifth-biggest economy will reportedly focus on bilateral agreements instead.
India would prefer to stay away from Regional Comprehensive Economic Partnership (RCEP) clinched between 15 Asia-Pacific countries earlier this month, according to the head of India and Southeast Asia economics at Oxford Economics, Priyanka Kishore, as quoted by CNBC.
The move reportedly comes as the Indian government tries to avoid the probable growth of cheap imports, which could create an enormous negative impact on some of the country’s industries, where local producers are not globally competitive.
The analyst stressed that India remains ill-placed to participate in regional value chains since it is focused on improving the manufacturing sector’s competitiveness.
“The common rules of origin under RCEP do boost its attractiveness as a supply chain destination and that poses a challenge to India’s ambitions of attracting supply chains relocating out of China,” Kishore said.
Signed on the sidelines of the annual summit of the Association of Southeast Asian Nations (ASEAN), the free-trade zone will cover nearly a third of the global economy.
The deal, inked between 15 Asia-Pacific countries lead by China, Japan, South Korea and Australia, is set to eliminate tariffs on a wide range of goods and strengthen supply-chain linkages in the region. It also covers such areas as e-commerce, investments, competition laws and intellectual property rights.
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