DNA Edit: RCEP needs India – New Delhi needs to protect dumping from China

India’s negotiating stance at Regional Comprehensive Economic Partnership (RCEP) summit  has to be clear. A clear stance would help the other constituents of the RCEP, and 16-member free trade agreement (FTA) — 10 members of ASEAN countries and six Asia-Pacific states — India, Japan, China, Japan, South Korea, Australia and New Zealand – to offer the right deal. What India offers is the largest market and a young population of consumers, again the largest in the world. These consumers of tomorrow will determine the fortunes of several companies and countries. This market cannot be given away easily. 

Moreover these consumers will also be job aspirants and drive the economy. If the Indian economy grows, it will pull up the economies of all the constituents of  RCEP. This is because unlike China, India does not have barriers to entry, trade and repatriation of profits. Almost every global corporation that has entered China is suffering ; dividend is difficult to repatriate, forget profits. Local partners steal trademarks, copyrights and even patents openly, to set up manufacturing units. Of the 16 countries, New Delhi has a trade deficit with 10. According to government data, this deficit with seven countries — Indonesia, Thailand, China, Japan, Korea, Australia and New Zealand — increased in 2017-18 from the preceding fiscal. 

Currently, RCEP countries want India to commit duty cuts on at least 92 per cent of tariff lines. Fearing that it would cede too much ground to China, India’s initial proposal was a three-tier tariff reduction plan. Countries that came under the third tier, including China, would only be offered 42.5 per cent liberalisation in tariff. India has sought greater commitment from RCEP members on liberalisation of the services sector, especially easy movement of its professionals to other countries.