Ministers, RSS urge govt to guard industry interests ahead of regional meet


Days ahead of the ministerial meeting of Regional Comprehensive Economic Partnership (RCEP) this week, some ministers, leaders of the Bharatiya Janata Party (BJP), and the party’s ideological mentor, the Rashtriya Swayamsevak Sangh (RSS) have cautioned the Union government against signing the treaty without adequate safeguards to protect the interests of Indian industry, agriculture and dairy farmers, three people aware of the development said on condition of anonymity.

Hectic parleys have been on since Monday over matters related to RCEP in the government, the BJP, and among the party’s associates.The general consensus among experts is that India needs to firm up its decision ahead of the crucial ministerial meeting in Bangkok from 10-12 October.

India now has a limited window as the 16-member trade block in the making is keen to conclude the treaty by November this year with or without India. The country does not want to miss the opportunity presented by this, one of the people said. The agreement is expected to be signed next year.

The RCEP agreement is being negotiated between the 10 ASEAN members (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and their six free trade agreement (FTA) partners — China, India, Japan, Korea, Australia and New Zealand.

So far, four crucial meetings have taken place on this matter since Monday. Prime Minister Narendra Modi met key ministers, including home minister Amit Shah, external affairs minister S Jaishankar, finance minister Nirmala Sitharaman, commerce and industry minister Piyush Goyal and minister of state for commerce and industry Hardeep Singh Puri. The other meeting was held at the home ministry.

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The BJP also held a round-table on the issue the same day. An informal interaction was held between union home minister Amit Shah, union commerce minister Piyush Goyal and the BJP’s organisations general secretary BL Santhosh with the functionaries of Bharatiya Mazdoor Sangh (an affiliate of RSS).

At a closed door meeting helmed by Santhosh, BJP spokesperson on economic issues, Gopal Agarwal and Vijay Chauthaiwale, who is in charge of the party’s foreign affairs department on Monday, stakeholders shared their concerns. The big issues were China and what the agreement would do to domestic manufacturers, the second person said.

India’s current trade imbalance with China was discussed, this person added, as were the ongoing agrarian crisis and the fact that while free trade agreements (FTAs) may have reduced tariff barriers for Indian exporters, they continue to face non-tariff and regulatory barriers, especially in services trade.

“What is worrying stakeholders is the existing trade deficit with ASEAN, Korea and Japan which has grown to $24 Billion in FY 2017 from $15 Billion in FY 2011. This imbalance has deteriorated in 13 of the 21 sectors, including chemicals, rubber, minerals, leather, gems and jewellery, metals and medical instruments ” the second person said.

On Tuesday, RSS chief Mohan Bhagwat also called for trade agreements that protect India’s interests and are drawn up on the country’s terms.

Though Bhagwat did not name RCEP; his statement is seen to be in reference to the churning within the government over the signing of the agreement. RSS affiliates have for long campaigned for regulation on imports from China, on the grounds that a limit would help the cause of small and medium enterprises.

“It was pointed out that China’s trade surplus with India was $ 0.6 Billion in FY 2001 and reached $ 52 Billion in FY 2017; China alone accounts for almost half of India’s total trade deficit,” the second person said.

The third person said that at the closed door BJP meeting, the need to protect the domestic market was also underlined and concern expressed that the agreement would hurt farmers.

“There is a section of manufacturers that feels Indian companies will be put at a disadvantageous position by making them compete with large multinational companies including those from China,” this person added.

Concerns of the dairy industry too were highlighted at the meeting, with some stakeholders pointing out that countries such as Australia and New Zealand will find an easy route into the Indian market once the RCEP agreement is signed. India’s dairy sector has already warned that cheap import of milk derivatives from these countries would affect their growth.

“Another worry was the impact the pact would have on employment. In the past, India has faced a situation where cheaper import of bamboo and raw material for incense sticks affected impacted employment in the micro and small sector,” the third person said.

Biswajit Dhar, a professor at the Jawaharlal Nehru University and an expert on trade said strategic considerations should determine India’s joining the RCEP. He said the manufacturing and agricultural sectors are already reeling and the government should focus on reviving growth