The Regional Comprehensive Economic Partnership (RCEP) agreement may hurt India’s export competitiveness. The free trade agreement could lead to flooding of goods from member countries into the Indian market. India’s imports may increase during the post-RCEP period, implying a revenue loss by as much as 1.3 per cent of GDP. For India, issues of tariff rate are as important as other areas under negotiations, mainly because India does not have trade agreements with all the countries involved in RCEP. For instance, India does not have a trade agreement with China, and the negotiations with Australia and New Zealand have not come into effect. RCEP could have a negative impact on sectors like steel, pharma, e-commerce, and food processing. India is already facing challenges from Singapore, Australia and New Zealand in the agriculture and dairy sectors. On the services front, India may have to negotiate its proposals such as greater mobility for professionals through measures like visa fee waivers. India had registered a trade deficit in 2018-19 with as many as 11 RCEP member countries.
RCEP comprises 10 Asean members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six free trade agreement partners - India, China, Japan, South Korea, Australia and New Zealand.