The RCEP agreement was against India's economic interest and national priorities, Commerce and Industry Minister Piyush Goyal said on Monday as the country decided not to join the China-backed mega free trade deal.
He said that India has consistently stood its ground to uphold its demands particularly over the trade deficit, stronger protection against unfair imports and better market opportunities for domestic goods.
"Congratulate PM @narendramodi for his bold and courageous decision to not join RCEP, since it was against our economic interests and national priorities. Modi hai to mumkin hai!," Goyal said in a series of tweets.
He added that the prime minister has shown his concern for farmers, dairy sector, MSMEs and domestic manufacturing.
"This will boost Make in India," he said.
Prime Minister Narendra Modi said on November 4 at Bangkok that India will not join the mega Regional Comprehensive Economic Partnership (RCEP) deal as negotiations failed to address New Delhi's "outstanding issues and concerns".
The Regional Comprehensive Economic Partnership (RCEP) is a mega free-trade pact being negotiated among 16 countries. The members were 10-nation bloc ASEAN, India, China, Japan, South Korea, Australia and New Zealand.
The presence of China in the RCEP grouping has raised concerns as the Indian industry was of the view that it would flood the domestic market with Chinese goods. Several sectors like IT and pharma have time and again flagged issues with regard to trade barriers in entering the market of the neighbouring country.
India has pitched for auto-trigger mechanism in the RCEP agreement as a remedy against sudden and significant import surge from countries such as China to protect domestic players.
Biswajit Dhar, a professor at Jawaharlal Nehru University, said that there were legitimate concerns of Indian industry with regard to this agreement.
"The grouping should have taken into account concerns of all the 16 countries before finalising the agreement. Now, we have to prepare ourselves for the future," he said.
India registered a trade deficit in 2018-19 with as many as 11 RCEP member countries including China, South Korea and Australia.
The agreement has aimed to cover issues related to goods, services, investments, economic and technical cooperation, competition and intellectual property rights.
In such trade agreements, trading partners reduce or eliminate customs duties on maximum number of goods traded among themselves. They also relax norms like visa regime to promote trade in services and attract investments.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)