Chennai: Traders have asked the government not to sign the Regional Comprehensive Economic Partnership (RCEP) agreement, as it will run against the interests of sectors, including steel, pharmaceuticals, e-commerce and food processing.
"The proposed Regional Comprehensive Economic Partnership (RCEP) agreement will run against the interests of domestic manufacturing and trade and will also hit the economy. It will damage export competitiveness since the nation’s trade balance is already skewed to a greater extent,' Confederation of All India Traders said in a memorandum submitted to Commerce Minister Piyush Goyal.
Once the pact is enforced, India will give more market access to China, South Korea and other RCEP countries and the country's trade deficit with them will increase further. In 2018-19 India had trade deficit with 11 out of the 16 RCEP member countries, including China, South Korea and Australia. India has a trade deficit of $63.1 billion with China, $11.9 billion with South Korea $10.2 billion with Australia.
The free trade agreement would enable the RCEP countries to flood their goods in the Indian market. "It is most likely that RCEP could have a negative impact on sectors like steel, pharmaceuticals, e-commerce and food processing,' said Praveen Khandelwal, Secretary General of CAIT.
Tariff concessions to South Korea and Japan have already led to substantial increase in steel imports without commensurate increase in investments in India by these countries.
