“We don`t have strong databases to understand and negotiate a good trade deal on certain commodities,” said N.R. Bhanumurthy, a professor of economics at the National Institute of Public Finance and Policy. In the event of price fluctuations, no one knows what will happen to the price of imported raw materials, especially for agricultural raw materials. There are fears that India`s decision could affect its bilateral trade relations with RCEP member states, as they may be more inclined to focus on strengthening economic relations within the bloc. This measure could leave India less room to open up the large market presented by RCEP – the size of the deal is gigantic, given that the countries concerned represent more than 2 billion of the world`s population. Escalating tensions with China is one of the main reasons for India`s decision. While China`s participation in the deal had already proved difficult for India due to various economic threats, the collision in the Galwan Valley deteriorated relations between the two countries. The various measures taken by India to reduce its exposure to China would have made its commitments under RCEP uncomfortable. Over the next 20 years, RCEP is expected to remove a number of tariffs on imported products for member states. The agreement also contains rules on intellectual property, telecommunications, financial and professional services and electronic commerce. India has decided to reject this trade agreement, which was concluded on Sunday 15 between 10 members of the Association of Southeast Asian Nations (ASEAN) – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam – and their six trading partners – Australia, China, Japan, South Korea and New Zealand. Subsequently, RCEP was also designed by ASEAN members and China in response to the U.S.-led Trans-Pacific Partnership (TPP), which was later renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, after the U.S.

withdrew from that agreement in 2017. Key features of the TPP included global market access, a regional approach to commitments, inclusive trade, regional integration and the management of new trade challenges. The RCEP Guiding Principles state that “the objective of opening RCEP negotiations is to achieve a modern, comprehensive, high-quality and mutually beneficial economic partnership agreement between ASEAN member states and ASEAN partners (free trade agreements)”. On 4 November 2019, India decided to end discussions on “important outstanding issues”. According to a government official, India had addressed “core issues” and concerns “consistently” throughout the negotiations and was asked to take this position, as they had not been resolved before the deadline for signing the agreement. Their decision was to safeguard the interests of industries such as agriculture and the dairy sector and give an advantage to the country`s service sector. According to officials, the current structure of RCEP still does not address these issues and concerns. ???? Click here to follow Express Explained on Telegram Of RCEP`s 15 countries, India has a trade deficit of about $105 billion with 11 countries, including $53 billion with China. All these trade differences would have been reduced if India had joined the mega-trade deal.