By Nitya Chakraborty
On the eve of the ASEAN Summit in Manila scheduled on November 15 to 17, a big pressure has been mounted on India by the member countries of RCEP including China and New Zealand to join the Regional Comprehensive Economic Partnership (RCEP) which was formalized in November 2020 and emerged as the world’s largest Free Trade Agreement (FTA).
15 Asia Pacific countries comprising the ten ASEAN as also China, South Korea, Australia and New Zealand were signatories to the RCEP formation. India opted out of the negotiations at the fag end citing concerns about safeguarding its domestic economy and possibility of imbalance in its trade benefits. Since then lot of discussions have taken place about the pros and cons of joining RCEP, but the official Indian position remains unchanged till now.
In the last six years, RCEP has emerged as the biggest FTA with the member countries accounting for 30 per cent of global GDP and population. In the last two years, the trade war has intensified. RCEP countries have made additional benefits due to their cooperation and joint strategy. Fresh discussions have started at the level of Indian experts whether India should now join the RCEP taking into account the changes that have taken place in the global trade.
In this context, Prime Minister Narendra Modi’s visit to Manila to attend the ASEAN Summit in the middle of this month has assumed significance. Though RCEP is not officially on the agenda there is a possibility that ASEAN nations will be looking for India joining RCEP giving up its earlier reservations. It is generally known that in 2019, India opted out of final negotiations on RCEP following the assessment that RCEP will be dominated by China and India will be losing its trade benefits due to Chinese competition Indian officials also assessed at that time that RCEP regulations would give better market access to China, Australia and New Zealand adversely affecting Indian market as China would flood Indian domestic market with low cost imports.
On the other hand, the trade experts who support India joining RCEP say that participation in RCEP may offer a significant economic and strategic advantage to India, and it can gain access to large integrated markets throughout the RCEP member countries. This joining would provide Indian companies greater access to big customer bases, and they may gain from reduced tariffs and prospects of an increased export due to the size of the trading bloc. India might earn up to US$60 billion by 2030 if it joins the RCEP, according to several studies. Furthermore, India’s participation in RCEP would demonstrate its commitment to regional economic integration in a globalised world where trade is frequently viewed as a growth engine.
India’s Ministry of Commerce & Industry made it clear in December 2024 that India is not reconsidering its stand on joining RCEP, stating that the country’s position remains unchanged and the outstanding issues and concerns remain unresolved. On the other hand, during November 2024, NITI Aayog suggested that India should consider joining RCEP to boost its manufacturing units and enhance exports, which would support the nation in seizing the global China plus One opportunities. But this suggestion was officially refuted later.
Trade analysts say India’s RCEP dilemma reflects a broader challenge of balancing global integration with domestic resilience. Remaining outside RCEP allows India to protect its sensitive sectors such as agriculture, dairy, and many MSMEs. However, it also limits India’s access to regional value chains and can reduce its influence in shaping Indo-Pacific trade architecture. The trajectory of global geopolitics, especially the US-China rivalry, along with ongoing reforms to strengthen MSME competitiveness, will play a significant role in India’s eventual participation in the RCEP. Until then, India’s calibrated approach of pursuing selective FTAs while observing RCEP from the sidelines remains a pragmatic middle path.
Amidst all these observations, early this week, Allan Bollard, former Governor of Reserve Bank of New Zealand suggested in an interview to an Indian daily that India should reconsider joining the RCEP mentioning that the membership could help the country tap into supply chains that have made China so competitive. Narendra Modi government is also emphasizing the use of supply chains for boosting Indian trade in recent days. China has also offered India to work jointly for making good use of the supply chains.
Significantly, soon after the New Zealand view was made known, China extended its official support to this view by posing the question whether India can become a global manufacturing power house keeping its distance from the world’s largest FTA RCEP simply to avoid competition from China. The Global Times, the official English newspaper of the Chinese Communist Party commented in its issue of November 4, whether India moves to join the RCEP is ultimately its own decision. But as the country seeks to strengthen its manufacturing base and expand the presence in overseas markets, broadening its network of free trade agreements can bring clear economic benefits.
According to GT, one such benefit is access to markets. The RCEP brings together dynamic economies in the Asia-Pacific, including China and South Korea, offering exporters easier access to a broad regional market. At a time when rising protectionism is making access to some developed economies more difficult, the pact offers considerable economic value to countries seeking to diversify their export destinations and tap into Asia’s growing market opportunities.
Then GT’s final observation is India’s commitment to developing its manufacturing sector and expanding its global reach is clear. Whether or not it joins the RCEP, closer integration with regional supply chains, including those linked to China, will remain an important part of that journey. The RCEP could offer India a faster route to its destination. The question is whether India is ready to get on board.
All these interviews and commentaries by RCEP member countries are meant for Indian policy makers including PM Narendra Modi who will be attending the Manila Summit. PM has a big official agenda including expanding the areas of India-ASEAN Maritime Cooperation. In fact 2026 has been chosen as the designated year for such cooperation. Apart, PM will discuss about collaboration in digital infrastructure, AI and talent mobility. India, though not a full member of ASEAN, has been given a special place as a dialogue and strategic partner. Apart, PM Modi will be attending the QUAD summit on the sidelines of ASEAN Summit to be participated by President Donald Trump and three Prime Ministers of Japan, Australia and New Zealand. (IPA Service)
