India keeps itself away from East Asian value chain as it refuses to join RCEP

LATEST INSIGHTS

Your Present Location :Home > LATEST INSIGHTS

India keeps itself away from East Asian value chain as it refuses to join RCEP

2020-07-09

Source: Global Times    Published: 2020-07-06


India is distancing itself from the value chain of the East Asian Economy, and it always wants to pay in little but want too much out of joining international organizations such as the Regional Comprehensive Economic Partnership (RCEP), a Chinese expert said.


The comment came after The Print said India has decided it won't join any trade deal that has China as a member, citing Indian official sources.


The border standoff and Indian government's ban on 59 apps developed by Chinese companies have added tensions to the China-India relationship.  


"The boycott of made-in-China products, not allowing Chinese companies to build local highways and considering banning Chinese telecom equipment are all expanding manifestations of anti-China sentiment in India. These will all require India to pay a lot, way larger than the price China needs to pay," Long Xingchun, president of the Chengdu Institute of World Affairs, told the Global Times on Monday.


Even if joining the RCEP is favorable for India, the Modi government lacks the ability to balance its short-term interests and long-term profits as well as regional and overall interests, Long noted.


In fact, the boycott on made-in-China products may harm Japanese and South Korean firms indirectly, because the supply chains of China, Japan and South Korea are closely connected with each other, according to Long.


"If India refuses to join the RCEP, it is keeping itself away from the value chain of the East Asian Economy, which results in disadvantage to India in the end," he said.


At the end of June all ASEAN member countries said they have made the decision to sign the trade pact by the end of this year, which may go into force by mid-2021.


"India was an important participant in the RCEP negotiations since the launch in 2012. We believe that India's participation in the RCEP would contribute to the advancement and prosperity of the region," read the joint statement of the 10th RCEP Inter-sessional Ministerial Meeting published on June 27.


Long Xingchun is a visiting research fellow with the Chongyang Institute for Financial Studies of Renmin University of China.