News:Union Minister of Commerce & Industry and Railways will be attending the 7th Regional Comprehensive Economic Partnership(RCEP) Ministerial Meeting in Bangkok.Thailand.
What is RCEP?
- RCEP is a proposed regional free trade agreement (FTA) comprising of ASEAN countries (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their 6 FTA partners (India, China, Japan, South Korea, Australia and New Zealand).
- RCEP aims to boost goods trade by eliminating most tariff and non-tariff barriers — a move that is expected to provide the region’s consumers greater choice of quality products at affordable rates.
- It also seeks to liberalise investment norms and do away with services trade restrictions.
Importance of RCEP:
- The RCEP member countries represent 49% of the world’s population and accounts for 30% of world GDP. It also makes up 29% of world trade and 26% of world FDI inflows.
- It will also reduce the overlapping between Asian FTAs.
- It will reduce the trade barriers in Asia and the new rules will be consistent with WTO agreements.
- It will promote easier FDI flows and technology transfers by multinational corporations.
India and RCEP:
- Under RCEP negotiations,India has been asked to eliminate import duties on 92% of its traded goods with RCEP members.However,India has offered to eliminate tariffs on 80% of products.
- Further,India is also concerned that the trade pact will allow greater access to Chinese goods which may have an impact on the Indian manufacturing sector.
Significance of RCEP for India:
- India should join the RCEP as if India is left out of the RCEP,it would make its exports price uncompetitive with other RCEP members countries.
- The rise in protectionism and non- tariff barriers and regulatory measures and the deadlock in WTO negotiations are also important reasons for India to join the RCEP agreement.
- RCEP also has the potential to influence India’s strategic and economic status in the Asia-Pacific region and help in fulfilment of India’s Act East Policy
- RCEP will facilitate Indian companies to access new markets. Further, it will give a boost to Foreign Direct Investment(FDI).