India will miss the bus to economic development by not joining RCEP: Chinese state media

India will miss the bus to economic development by not joining RCEP: Chinese state media

India has committed a “strategic blunder” and “missed the bus” to long-term growth, Chinese state media has said about New Delhi’s decision not to join the China-led 15-country Regional Comprehensive Economic Partnership (RCEP), signed on Sunday at an online ceremony hosted by this year’s ASEAN chair, Vietnam.

The 15 countries that signed the deal span the Asia-Pacific region including China, Japan, South Korea, Australia, and New Zealand, along with the 10 members of the Association of Southeast Asian Nations (ASEAN).

Signed after eight years of negotiations, the RCEP has created the world’s largest trading bloc, aiming to boost the member nations’ economic growth that has been hit by the Covid-19-pandemic.

Together, they account for around 30% of the world’s gross domestic product (GDP) and population.

“The RCEP agreement covers a market of 2.2 billion people, or almost 30% of the world’s population, with a combined GDP of $26.2 trillion or about 30% of global GDP,” official news agency Xinhua reported.

It hailed the deal as “…not only a monumental achievement in East Asian regional cooperation but more importantly, a victory of multilateralism and free trade”.

Two major economies - the US and India - are not part of the deal. India, which had initially taken part in the negotiations, pulled out of the trade bloc last year.

There are “significant outstanding issues, which remain unresolved”, New Delhi said last year before pulling out of the RCEP.

New Delhi’s list of concerns includes the possibility of opening up its markets to cheap, China-made goods, with which it already has a huge bilateral trade deficit.

Chinese South Asia experts were quick to criticize India for not joining the trade bloc, calling it a mistake, and blaming “interest groups” for the decision.

“The Indian government argues that as China has an advantageous position in the deal and India has a ballooning trade deficit with China, such a context would leave India in an unfair position, were it to join,” Liu Zongyi from the Centre for China-South Asia Cooperation at Shanghai Institutes for International Studies wrote in the Chinese state media.

“However, most international observers believe that it’s the work of some interest groups in India, trying hard to obstruct India’s participation for their own interests, while Indian Prime Minister Narendra Modi and the Bharatiya Janata Party made concessions in order to win their support,” Liu wrote.