He highlighted India to be among few countries not a part of large trade agreements like Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
- These agreements aim to remove trade barriers and promote reciprocal investment by tariff facilitation and harmonizing environmental and labor protection standards.
Benefits of Joining to India
- Support Micro, Small & Medium Enterprises (MSME): They constitute 40% of India's exports.
- Integrate into Global Supply Chain: Constituting 70% of the World’s trade
- Harness China plus one opportunity: High tariffs prevent diversification of supply chains away from China.
- Increase India’s productive capacity: Facilitate easy import creating job prospects; enhance profits and capacity utilization of the private sector, etc.
- Political Advantage: Opportunity to shape emerging trade architecture like E-commerce.
Concerns for India
- Cheap Imports: Elimination of tariffs may lead to greater rise in imports worsening trade deficits.
- Impact on Indian Enterprises: Stricter rules like labor conditions and environmental protection impact local and less competitive Indian industries.
- Domestic considerations: Opposition from Indian dairy sector on joining RCEP fearing strict competition from industrialized countries
Way Forward
- Revisiting past agreements: Data-driven approach to navigate complex global economic landscapes.
- Prioritize long-term economic goals: In terms of self-reliance, job creation, and strategic autonomy.
About RCEP
About CPTPP
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