Bargaining by India should not close its doors at RCEP: Arvind Panagariya

My hope remains that we bargain hard but in good faith and with the intention to eventually join the grouping, says Panagariya

Trade economist and former NITI Aayog vice-chairman Arvind Panagariya says that bargaining by India should not close its doors at the RCEP. He tells Indivjal Dhasmana that India’s intention should be to eventually join the grouping. Edited excerpts:

At a recent event in Delhi, you had said that India should bargain hard but join the RCEP. What is your take on India now deciding to not join the RCEP?

The current stance by India is fully consistent with what I said.  Bargaining is still on and India is bargaining hard. Other 15 RCEP countries have issued a very conciliatory statement stating that they would try to resolve the differences. My hope remains that we bargain hard but in good faith and with the intention to eventually join the grouping. 

How will you react to India’s statement that joining the RCEP would have impacted livelihood of the vulnerable section in the country?

So far as agriculture is concerned, it remains a sensitive issue in India. On industrial products, my view is that we should not fear competition. Huge inefficiencies remain in many of our manufacturing sectors and these sectors need to be subject to greater competition. Any increase in imports cannot happen without increase in exports unless someone is giving us imports for free. Therefore, liberalisation will only lead to a movement in resources out of inefficient, high-cost import-competing enterprises to more efficient export-oriented enterprises. This will help and not hurt the vulnerable section by replacing informal, low-wage jobs by high-productivity and high-wage jobs. 

India said the present form of the RCEP agreement does not fully reflect the basic spirit and the agreed guiding principles of the RCEP. Do you agree?

Will pass on this since I do not have enough details in this regard.

RCEP would have devastated India’s agriculture, dairy and MSME sectors. Do you agree?

It will take some time for us to overcome the sensitivities in agriculture and dairy, among others. The road to it goes through greater creation of good jobs in industry and services. Here, I think we need to create a pathway for workers to move from both agriculture and micro and small enterprises to medium and large enterprises. According to PLFS (the Periodic Labour Force Survey) 2017-18, 44 per cent of our workforce is in agriculture and another 42 per cent in enterprises with 19 or fewer workers. These are predominantly subsistence jobs and we need to create better-paid jobs for these workers. Opening the economy to trade is a step towards creating more of such jobs.     

The doors are still open for India to join the RCEP. Should India tap that opportunity?

Absolutely!