RCEP debate: Issue of diminishing returns from FTAs plagues India

The basic building block of the proposed RCEP - the Asean FTA - continues to be one-sided

The government says the pressure to remove tariffs and provide access to India’s vast untapped domestic market, without getting much in return, ultimately forced India out of the Regional Comprehensive Economic Partnership (RCEP) deal. The fear is not unfounded, say experts, as New Delhi’s existing free-trade agreements (FTAs) suffer from the same issues, leading to disproportionate growth in imports while exports rise slowly.

This is true for each of the five largest trade deals currently in force, with growth in imports, in most cases, increasing at double the pace of rise in exports, they say.

“New Delhi’s trade exposure to these nations