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Opinion | India’s rejection of RCEP and free trade will make it poorer and less relevant
- The Regional Comprehensive Economic Partnership was an opportunity to recapture India’s success through economic liberalisation
- India now finds itself isolated and has compromised its influence in a region where economic integration has become a top priority for most countries
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A day after the Regional Comprehensive Economic Partnership (RCEP) agreement was concluded in India’s absence, Indian Minister of External Affairs Subrahmanyam Jaishankar launched a scathing attack on trade and globalisation.
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“In the name of openness, we have allowed subsidised products and unfair production advantages from abroad to prevail,” he said, asserting that the Indian government had decided to move away from trading arrangements in pursuit of an Atmanirbhar Bharat, or self-reliant India.
“The effect of past trade agreements has been to deindustrialise some sectors,” he said. “The consequences of future ones would lock us into global commitments, many of them not to our advantage.”
Some people might see Jaishankar’s comments as a jibe at China. Indians often complain that the Chinese unfairly subsidise domestic production and then dump their products in the Indian market. Indians also argue that, while China is able to dump its manufactured goods in India, Indian exports in the pharmaceutical and information technology sectors are subject to crippling restrictions by China.
India’s allergy to trade – and the foreign minister’s comments – goes far beyond China, though. For several years, India has struggled to agree on trade liberalisation with myriad partners, from Australia to the European Union and even Sri Lanka. Between 2016 and 2020, India introduced the second-highest number of trade restrictions among all Group of 20 economies, according to the Global Trade Alert database.
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RCEP: 15 Asia-Pacific countries sign world’s largest free-trade deal
RCEP: 15 Asia-Pacific countries sign world’s largest free-trade deal
Despite its obvious geopolitical value, India was kept out of the Obama administration’s Trans-Pacific Partnership (TPP) trade deal. This was in large part because none of the participating countries believed India would agree to its terms.
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