Regional Comprehensive Economic Partnership (RCEP) is the economic alliance formed with China and other 14 countries primarily from Asia recently but including non Asian countreis like australia, New Zealand. India was said to have entered into this economic pact and was negotiating for its membership, but withdrew later when it rightly found that this trade partnership would only benefit other countries but not its interests.
Maybe in the long run India would have to enter this trade pact but certainly not at this time when China's hegemony is strangling many of the Asian and African countries.
With many of the other Asian countries India already has a free trade pact except China.
China is a net exporting country to India and therefore any free trade pact removing the tariff barriers would only directly and indirectly benefit China.
Let us look at the specific pros and cons to RCEP:
Pros
1)The purpose of RCEP was to make it easier for products and services,investments, intellectual property rights of each of these countries to be available across the region. Differential rights have been granted to economically less developed countries
2)this pact covers the economic powerhouses of Asia including Japan, China and South Korea covering roughly 30% of Global GDP and 30% of World's population.
3)the pact is intended to reduce redtape and also tariffs.
4)it will bring about uniform customs procedures and rules of origin which will facilitate global supply chains and trade within the region.With less regulatory framework trade will become seamless.
Cons:
1)this does not cover labour unions, environmental concerns and sustainability,human rights and government subsidies.
2)it does not commit countries to open services and other vulnerable areas of their economies.
3)Some countries may become dumping grounds for other manufacturing countries.The pact consists of countries that are the largest exporters of the world.
4)India's trade deficit with 11 RCEP member countries has worsened post 14 RTAs(Regional Trade Agreement) already signed with them. There have not been any significant export gains for India out of the already existing 14 RTAs.
5)Tariff reduction in a calibrated manner suggested by India has not been accepted by other RCEP countries. India suggested that with ASEAN countries it will reduce tariffs by 80%,for other countries like Japan, South Korea by 65% and for other countries like China, Australia,New Zealand by 42.5%.The countries disagreed and demanded uniform relief of 90% on tariffs.
(Courtesy:Rabobank Research analysis)
6) In order to protect domestic manufacturing, India suggested auto-triggering and snapback measures which will kick in immediately if certain agreed thresholds get breached in imports from certain countries esp. China for manufacturing imports and Australia and New Zealand for dairy products and other ASEAN countries for plantation products like Rubber .
7)India is already suffering from half of its trade deficit coming from China, and post the pact its trade deficit may worsen as with other RTA countries since India is a big consumption destination with vast population.Moreover the vagueness in addressing the concerns on trade in Services sector in which india has a comparative advantage. also left India with no option but to keep out of it for some more time.
8) Since India has launched its "Atmanirbhar Bharat", PLI schemes for giving a huge push for Make in India , India will be benefited from RCEP after its manufacturing sector makes some significant gains in the domestic market.
9)Some countries do not see political alignments with few other countries like India and China due to the ongoing geopolitical tensions.(link)
RCEP member countries have kept the door open for India and india may well take a decision to join this after a year or two lag when its domestic economy starts growing at 8-10%. India can bring strong institutional policy framework to RCEP and many countries want India to be in RCEP as a counterbalance to China's growing clout and influence.
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