Can India be part of Asia’s growth story without the RCEP – or China’s trust?

New Delhi’s rejection of the trade pact was largely driven by concerns about Beijing, with which it is locked in a bitter border stand-off

Whether India can continue to compete economically in the region could depend on individual trade agreements with other countries

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Protesters at an anti-China demonstration in Kolkata earlier this year. Photo: AFP

Published: 12:00pm, 24 Nov 2020Updated: 11:06pm, 24 Nov 2020

The decision of 15 Asian countries earlier this month to seal the Regional Comprehensive Economic Partnership (RCEP), heralding a major step forward for economic integration, has sparked a debate among diplomats and academics in India about whether the country is being left out of Asia’s growth story because of its decision not to join the group.

“India has been repeatedly missing the Asian bus, despite our desire to get on board,” Sanjaya Baru, an adviser to former prime minister Manmohan Singh, told The Hindu newspaper. He compared the current situation to the 1990s, when New Delhi decided not to join the Asia-Pacific Economic Cooperation (Apec) – another major trade group, comprising 21 member countries.

The decision not to join Apec slowed the pace of economic reforms in India and also made several of the group’s members wary of India, which they viewed as overly protective of domestic industries. Although the moratorium set by Apec on taking new members was lifted in 2010, and India has indicated a willingness to join, there has been no unanimity in the trade bloc to include India.

The RCEP, which covers a third of the global population and a combined GDP of US$26.2 trillion, could have been significantly bigger if India – with 1.3 billion people and a GDP of about US$2.7 trillion – were a member. But it pulled out of the grouping last November after seven years of negotiations on the conditions for its membership, arguing its key concerns were not addressed.

For example, India wanted stricter “rules of origin” to prevent cheap Chinese goods from flooding its domestic market and more safeguards for its agricultural industry. It was also unhappy with China’s reluctance to grant concessions as well as with other Asian countries’ attempts to put up non-tariff barriers.