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India refused to join RCEPs agreement

India refused to join RCEPs agreement 

India has denied joining the mega Regional Comprehensive Economic Partnership (RCEP) agreement as RCEP failed to address the negotiations raised by India. 

India to not join RCEP Agreement:

  • Despite the concerns, India raised a red flag over the move to use 2014 as the base year for tariff reduction. 
  • RCEP negotiators are to sign the deal in 2020. The new tariff regime by RCEP will be in practice from 2022, and the duties will be of 2014 levels. 
  • RCEP Agreement does not reflect the basic spirit of India and the agreed guiding principles of RCEP. 
  • It does not address India's outstanding issues and concerns satisfactorily. Hence, it is not possible for India to join the RCEP Agreement. 

Key Points: 

  • India raised concerns which include the threat of circumvention of Rules of Origin due to tariff differential. It failed to address the issues of trade deficits and the opening of services. 
  • Indian also questioned the design of the trade agreement along with the previous services and investment rules. The plan will see the elimination of import duties on 80-90% of goods.
  •  The biggest concern of India is goods trade. The domestic industries of India feared that the lower customs duty would see a flood of imports, especially from China, with which India has a massive trade deficit. 
  • India has also raised regarding the issue of unavailability of Most Favoured Nation (MFN) obligations with which it would be forced to give similar benefits to RCEP countries that it gave to others. 

RCEP:

It aims to create the biggest free-trade region in the world. The RCEP comprises 10 Asean nations and six of its free trade agreement (FTA) partners, namely India, China, Japan, South Korea, Australia, and New Zealand.

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