"This move is a clear reflection that India is carefully considering its interest to protect industry and farmers against unfair competition. It will give huge relief to the dairy sector," Professor at Indian Institute of Foreign Trade (IIFT) Rakesh Mohan Joshi said.
Sharing similar views, engineering exporter and former FIEO (Federation of Indian Export Organisation) president S C Ralhan said that it was a welcome decision by India.
"Steel and certain engineering players have raised serious objections over this pact. RCEP would not have given any advantage to exporters to explore Chinese market," Ralhan said.
He said participating in the pact would have resulted in increasing imports from China, with which India has a trade deficit of over USD 50 billion.
Presence of China in the grouping has raised concerns as Indian industry was of the view that it would flood domestic market with Chinese goods. Several sectors like IT and pharma have time and again flagged issues with regard to trade barriers in entering the market of the neighbouring country.
India has pitched for auto-trigger mechanism in the RCEP agreement as a remedy against sudden and significant import surge from countries such as China to protect domestic players.
Biswajit Dhar, professor at Jawaharlal Nehru University, said that there were legitimate concerns of Indian industry with regard to this agreement.
"The grouping should have taken into account concerns of all the 16 countries before finalising the agreement. Now, we have to prepare ourselves for the future," he said.
Dhar said India always wants to participate in the global trade taking into account the vulnerabilities of all the stakeholders.
"The government should now look at policies which are required to strengthen domestic industry so that we can participate in such agreements," he added.
Prime Minister Narendra Modi said on Monday in Bangkok that India will not join RCEP deal as negotiations failed to address New Delhi's "outstanding issues and concerns".
"The present form of the RCEP agreement does not fully reflect the basic spirit and the agreed guiding principles of the RCEP. It also does not address satisfactorily India's outstanding issues and concerns. In such a situation, it is not possible for India to join RCEP agreement," Modi said.
India has registered trade deficit in 2018-19 with as many as 11 RCEP member countries including China, South Korea and Australia.
The agreement aims to cover issues related to goods, services, investments, economic and technical cooperation, competition and intellectual property rights.
In such trade agreements, trading partners reduce or eliminate customs duties on maximum number of goods traded among themselves. They also relax norms like visa regime to promote trade in services and attract investments.
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