Sunday, November 10, 2019

Why India opted out of the RCEP agreement: Explained in six charts


Some experts, in addition to the government, have maintained that the reason for the walkout is India's adverse trade balance. However, many critics view this as a protectionist step.


India decided to walk out of the biggest regional trade partnership the world could have seen. The Regional Comprehensive Economic Partnership could have given — possibly it still can — almost unrestricted access of each other’s markets to the members.

Some experts, in addition to the government, have maintained that the reason for the walkout is India’s adverse trade balance. However, many critics view this as a protectionist step.

The data shows India has been protecting its domestic interests for long. The average tariff on imports into India, according to the World

Trade Organization, went up between 2010 and 2015. Most of it was due to farm products.
The (weighted) average tariff applicable to most favoured nations to sell their goods in India is highest among the 10 Asian peers, at 7.6 per cent. This is not strictly comparable with WTO data. Moreover, India only has about 3 per cent of tariff lines at zero duty, lowest among its peers, and lower compared to Vietnam’s 32 per cent .

The data also shows trade growth has largely been independent of trade deals: India's share of trade with NAFTA countries has grown as fast as its share with North-East Asian countries, and ASEAN, as well . While India does not trade preferentially with any of the NAFTA members, it does, with two members of NEA and with ASEAN.

In terms of acting against dumping of cheap and excess goods, India has become more proactive in recent times. More dumping cases now reach their conclusion. But, on the flip side, members of the probable RCEP lead in dumping goods into India .

Business Standard

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