India's decision to not join the RCEP deal would safeguard millions of jobs in small-scale enterprises and balance economic interests, as a trade-opening agreement of this scale has far-reaching consequences and may deepen the trade deficit with China, the industry said on Tuesday.
Prime Minister Narendra Modi on Monday conveyed India's decision not to join the RCEP deal at a summit meeting of the 16-nation bloc, effectively wrecking its aim to create the world's largest free trade area having half of the world's population.
"For India to capitalise on her strengths, it was imperative to mitigate the rampage caused by duty-free imported goods. With this move, we look forward to creation of more job opportunities in India and overall boosting of economic and investor sentiments.
"For the metal sector, which is already under stress caused by global trade wars and protectionist measures, signing RCEP would have resulted in further deepening of India's trade deficit with China and other nations," Jindal Stainless MD Abhyuday Jindal said.
India has been forcefully raising the issue of market access as well as protected lists of goods mainly to shield its domestic market as there have been fears that the country may be flooded with cheap Chinese agricultural and industrial products, once it signs the deal.
"India opting out of RCEP, for now, is a well thought out call by Prime Minister Narendra Modi as trade-opening agreement of such far-reaching consequences would need deeper study of our comparative advantage and whether our concerns are properly addressed in the proposed framework," Assocham President B K Goenka said.
The RCEP negotiations were launched by the ASEAN (Association of Southeast Asian Nations) leaders and six other countries during the 21st ASEAN Summit in Phnom Penh in November 2012.
The negotiations for the proposed free-trade agreement included 10 member countries of the ASEAN and six of the bloc's dialogue partners -- China, Japan, South Korea, India, Australia and New Zealand.
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