Relevance : GS Paper II
Introduction
RCEP aims to create the world’s largest trading block.
Importance of RCEP
- It will constitute almost half of world’s economy.
- It consists of three of the six largest economies of the world.
- Out of top 16 countries with the largest GDP, six belong to RCEP.
Why should India join RCEP ?
- India can balance China by joining it.
- RCEP can bring in newer technology and make Indian industry far more competitive.
- RCEP provides Indian industry a huge market to grow and expand.
- Opening up markets and reducing tariffs will benefit consumers.
- RCEP is a natural follow up of India’s Act East policy.
The China factor
- By entering RCEP, India may be able to get greater market access to even China.
- India’s presence in this trading block could lead to a large number of multinationals shifting their production facilities from China to India.
- RCEP will force China to provide a level playing field.
Way forward
- India must ensure that RCEP includes unbridled access for Indian service providers.
- Protection will need to be ensured for some sensitive industries crucial for national security.
- Some temporary protection may be required for certain sectors of agriculture, crucial for food security.
Conclusion
India’s absence from RCEP will virtually handover this significant grouping to China, which is certainly not in India’s interest.
