India should further open up its economy and bargain from the position of strength while negotiating at the Regional Comprehensive Economic Partnership (RCEP), eminent economist Surjit Bhalla said on Monday.
RCEP is a comprehensive free trade agreement being negotiated between the 10 ASEAN member states and partners Australia, China, India, Japan, Korea and New Zealand.
"We have to enter these trade agreements and that is part of opening up the economy to get trade benefits," said Bhalla who will soon take charge as the Executive Director for India on the board of International Monetary Fund (IMF).
"But at the same time, we need to be cognizant of our own interests. We should negotiate from a position of strength rather than that of weakness," he told ANI in an interview.
New Delhi is seeking greater market access for Indian goods and greater flexibility to promote trade in services at RCEP negotiations which began in Cambodia in 2012 covering areas like trade in goods and services, investment, market access, economic cooperation, intellectual property and e-commerce.
Prime Minister Narendra Modi, who is in Bangkok for the East Asia and RCEP summits on Monday, said recently that India remains committed to a comprehensive and balanced outcome from the ongoing RCEP negotiations but would like a win-win outcome.
Even government sources have stated that India is not making any last-minute demands at RCEP. "We have put forward reasonable proposals in a clear manner and are engaged in negotiations with sincerity. We would like to see commensurate levels of ambition on services from many of our partners, even as we are ready to address their sensitivities," they said.
Sources also added that overall, we are clear that a mutually beneficial RCEP, in which all sides gain reasonably, is in interests of India and of all partners in the negotiations.
Meanwhile, Bhalla also said there have been problems with trade agreements in the past. "We recognise these problems and any future engagements should keep these in mind. I believe joining RCEP is a useful policy for our growth but only on our terms," he said.
The first term of Modi administration from 2014-2018 was about economic reforms in redistribution sense for the poor, said the economist who was a member of the Prime Minister's Economic Advisory Council.
"The world is going through an economic slowdown. I believe India is in the last stage of its slowdown. This is the right time to accelerate economic reforms. We have got to take policy measures for the agriculture sector, financial markets, investments and industry", he said.
Bhalla said though India has the potential to accelerate the growth rate to 7.5 per cent, it has not been able to achieve it.
On reports of India Inc opposing a directive by the Securities and Exchange Board of India (SEBI) on separating owner from management, he said that with public sector units it can be considered as a good thing. "However, each regulation should be studied to see if it is fulfilling the objective. Broadly, I believe India is a very over-regulated economy."
Bhalla said 'elephant bonds' can be a solution to get black money back into the country.
"Indonesia, Philippines and Pakistan have had analogous schemes to attract black money from abroad. We want that money back. 'Elephant bond schemes' are well within the Supreme Court guidelines on tax amnesty schemes.