NEW DELHI: One day after 15 countries signed the RCEP, excluding India, Foreign Minister S Jaishankar mounted a vigorous defense of the government’s decision to stay away from trade agreements that could end up deindustrializing India.
Addressing the Deccan Dialogue at the Indian Business School, Hyderabad, Jaishankar That said, the outside world was not all free and fair trade, but full of “non-tariff barriers and state capitalism.”
“The effect of previous trade agreements has been the deindustrialization of some sectors. The consequences of futures would lock us into global commitments, many of which would not benefit us. Those who argue emphasizing openness and efficiency don’t present the whole picture. ”
It was a direct blow to China, whose policies of subsidizing its state-owned companies end in Chinese products deeply undermining those in other countries and hitting its own manufacturing capabilities. China also received additional indirect criticism. Jaishankar reminded his audience that it was India that called on China’s BRI and shaped the international discourse on connectivity projects, which must be transparent, environmentally friendly and respectful of sovereignty.
“In the name of openness, we have allowed subsidized products and unfair production advantages from abroad to prevail. And meanwhile, this was justified by the mantra of an open and globalized economy. ”
In November 2019, India refused to go ahead with RCEP because the deal did not take India’s concerns into account. India’s decision was a difficult and deliberate decision at the highest levels of government.
India feared the deal would turn into a free trade deal with China through the back door, other countries notwithstanding, which is one of the reasons India is currently reviewing several of its FTAs in the region. Second, India requested to move the base year from 2014 to a more recent year, but that was rejected. The deal did not protect against import surges, nor did it address India’s demands on services and the movement of professionals.
Jaishankar said: “It was quite extraordinary that an economy as attractive as India allowed others to set the framework. As time went by, our situation became increasingly dire. The choice was to redouble an approach whose damaging consequences were already apparent or to have the courage to think about the problem for ourselves. We chose the latter. ”
India has adopted an “Atmanirbhar Bharat” policy to encourage self-reliance and at the same time stay away from protectionism.
Explaining the concept, Jaishankar said, “It is entering the global arena with cards to play, not just to provide a market for others. It is really about seriously building a comprehensive national power. Our success in doing so will determine the future terms of engagement and our standing with the world. ”
In the post-pandemic world, this will have different implications, requiring India to proceed with caution and care.
Recognizing this, he said: “As the world of technology applications and global production becomes more integrated, today’s options have a much deeper strategic implication. The limited progress we have made and the gap to our real potential puts us in an especially difficult position. ”
In video: Not all pacts are good for India, EAM Jaishankar defends the passage of RCEP
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