The RSS-affiliate Swadeshi Jagran Manch (SJM) has called for a clear decision by the Centre to quit the ongoing Regional Comprehensive Economic Partnership (RCEP) negotiations as it will worsen India’s trade deficit and hurt the vulnerable agriculture and dairy sectors.

“Of the 15 partner countries in the RCEP, India already has free trade agreements covering 12 countries. Since these pacts were signed, our trade deficit has increased with all, including the ASEAN, South Korea and Japan. If we extend this to New Zealand, Australia and China (as part of the RCEP), one can imagine what will happen to the overall trade deficit,” said Ashwani Mahajan, co-convener, SJM, in a discussion on RCEP and India organised here on Thursday.

RCEP member countries account for $104 billion of India’s total annual trade deficit of $162 billion, Mahajan pointed out.

India is under a lot of pressure to provide market access for goods, pointed out Bipin Menon, Director, Commerce Ministry, but it is trying to be as conservative as possible in its negotiations with China and is taking into account all domestic sensitivities. “It is a very big agreement. We have to also see if it will hurt our exporters if we are not part of the agreement. We need to collectively decide how to move forward,” he said.

Menon said RCEP members were working towards concluding the pact by November this year. Since this could be the biggest regional free trade pact, India needs to have a cautious and balanced approach, he said.

Growing trade deficit

According to JNU Professor Biswajit Dhar, the government has to try and understand why the country had not benefited from the free trade pacts signed so far. “We have to ask why can’t we get increased market access in countries with which we have free trade pacts while our imports are increasing sharply resulting in a galloping trade deficit. The answer is that our industry is failing to stand up to competition,” he said.

He said that over the past year, the government has increased import tariffs on a variety of items to protect the domestic industry, and it was not logical to drag them into the RCEP agreement which could result in zero tariffs for 90-92 per cent items.

Dhar said the threat to India does not come only from China, but also countries like Australia and New Zealand which are desperate for a market for their wheat, rice and dairy products.

Agreeing with Dhar, Mahajan said that Australia’s export competitiveness in wheat, dairy and meat products, and New Zealand’s role as a major global dairy exporter accounting for 30 per cent of global dairy exports, make Indian agriculture and dairy sectors totally vulnerable. “It is clear these countries will ask for specific access to these markets. After India-ASEAN FTA, our deficit with ASEAN, especially in plantation products, has already increased and destroyed several plantations in the South, making workers unemployed. This process will accentuate further under the RCEP,” he said.

In a letter to Prime Minister Narendra Modi, ahead of the RCEP Summit in November last year, SJM had said that India should quit RCEP as it would not benefit any section or constituency. “Given the impending elections in 2019, it will be a disaster for the government to sign or even make commitments giving concessions on specific chapters,” it said.

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