RCEP: Know more about free trade
India has decided to opt out of Regional Comprehensive Economic Partnership (RCEP), which could become the world’s biggest trade agreement. India thinks that the treaty or deal would affect our farmers and smaller businesses adversely.
What is RCEP
The Regional Comprehensive Economic Partnership is a free trade agreement originally devised to consist of 16 countries across the Asia-Pacific region. Now that India is not part of it, the deal will have 15 members. The pact looks to drop tariffs and duties between the members so that goods and services can flow freely between them.
When goods are transported from one country to another, there are charges levied on them. The country which sells good is a called exporter and the country which buys them is called importer. With the RCEP agreement in place, the 15 countries which signed the treaty would not have to pay these charges. There would be free flow of goods and services between these nations.
Who are those 15
At the RCEP’s administrative core is ASEAN: A group of 10 Southeast Asian countries – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. The ASEAN bloc is joined with six dialogue partners: China, Japan, South Korea, Australia and New Zealand.
Why India opted out
India has few concerns related to dairy, pharma, agriculture, and chemicals products. If India would have signed the deal, China could export cheaper Chinese products into the country much more easily. Because of this, the Indian sellers would have lost their businesses. Also, it would be difficult to compete with dairy products of New Zealand and Australia.
India is focusing on Make in India which means that we want to produce everything here and sell outside. Selling is always profitable for business.