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India’s decision to withdraw from the Regional Cooperation for Economic Partnership (RCEP) has come as a breather for the metals industry.
“At the end of day, if other countries are allowed to ship their material into India at nil duty, then many of them send in products that are priced cheaply and we come under the threat of predatory pricing. The RCEP is an expanded version of Free Trade Agreements and the threat of Chinese dominance is a vital factor in the RECP. In 2016-2017, we saw what steel dumping did to our industry and we live under the shadow of those events. The Indian steel industry is particularly vulnerable to this,” the Indian Steel Association said in an emailed response to BusinessLine .
On Monday, India decided to abstain from joining the RCEP pact saying it will not “compromise” on its core issues. Prime Minister Narendra Modi, in his speech at the Summit, said that his decision of not joining the agreement was guided by the impact that it would have on the lives and livelihoods of all Indians, especially the vulnerable sections.
Read more:India refuses to sign up for RCEP; says its core concerns remain unresolved
The move came as a surprise to many who were expecting that India will join China and 14 other countries in what could become the world’s biggest trade agreement. The RCEP members include the 10 ASEAN countries, and Japan, South Korea, Australia and New Zealand.
Also read:India’s RCEP move clashes with joint statement, creates confusion
Also commenting on the decision, Managing Director, at Jindal Stainless, Abhyuday Jindal said, “The resolution to opt out of the RCEP agreement is a rational step to maintain a level playing field for the Indian industry. For the metal sector, which is already under stress caused by global trade wars and protectionist measures, signing up for RCEP would have resulted in further deepening of India's trade deficit with China and other nations.”
Highlighting the impact on the copper industry, Pankaj Kumar, Chief Executive Officer at Sterlite Copper said, “India’s decision of opting out of RCEP as the resulting surge in imports would have caused irreparable injury to the Indian copper industry rather than supporting the cause of the Make in India initiative.”
“Further, India’s adverse trade balance with RCEP nations will come under control...Our country’s trade deficit has increased significantly owing to the copper plant shutdown in Thoothukudi, due to the now increased dependence on imports for meeting our country’s copper needs,” Kumar added.
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