‘India First’ remains PM Modi’s firm mantra

Home Minister and BJP president Amit Shah writes on what prompted Prime Minister Narendra Modi’s decision to stay away from RCEP.
‘India First’ remains PM Modi’s firm mantra


In the annals of Indian history, November 4, 2019, shall go down as a historic milestone for her bold decision to stay away from the Regional Comprehensive Economic Partnership (RCEP). The decision also cements India’s growing stature as a country that is rock-solid in its resolve to not only protect its interests but also boldly ward off any attempts to arm-twist her. Under the dynamic leadership of Prime Minister Narendra Modi, the New India of today reflects a new self-confidence.

India’s historic decision not to join RCEP was summed up by PM Modi himself: “Whenever I try and gauge India’s interest in light of her joining the RCEP, I do not get an answer in the affirmative; neither Gandhi Ji’s policy of self-reliance nor my wisdom allow me to join RCEP.”

What makes this decision significant is that this has yet again demonstrated that PM Modi can go to any extent to safeguard the interests of farmers, small and medium enterprises, textile industry, dairy and manufacturing, medicine, steel and chemical industries. He did not compromise on it since the agreement did not seem to accommodate India’s concerns on issues like trade losses and dumping. I am of the firm view that India should not be party to any such international treaty which is one-sided and against the interests of our farmers and entrepreneurs.

We all are aware how Congress led UPA government failed in safeguarding the interests of India and that in 2007 it had already begun to think of engaging in Regional Trade Agreement (RTA) with China. How this affected our trade with China is borne out of the fact that during UPA’s tenure, India’s trade losses with China grew 23 times - from $ 1.9 billion in 2005 to $ 44.8 billion in 2014. It takes little to make out how hard this hit the indigenous industries.

In fact, Congress has had a history of compromising with the interests of India’s farmers and industries and an example of this is the 2013 Bali Agreement. The then Commerce Minister Anand Sharma under the leadership of PM Manmohan Singh, while participating in the WTO conference, had strangely weakened India’s stand on our provisions for agriculture subsidy and support prices to farmers. This could have created havoc for the farmers but for the timely intervention of PM Modi in 2014, who ensured that then Commerce Minister Nirmala Sitharaman rejects the proposal in order to safeguard interest of our farmers.

It is ironical that Congress which has had a shaky history of dealing with such international treaty is desperately trying to take credit for the decision of the Prime Minister of staying away from RCEP. In fact, history is testimony to the fact that it was the lack of foresight of the Congress that had led to India agreeing to become part of this bloc. In its original form, other than 10 ASEAN countries, only China, Japan and South Korea were to join RCEP. However, thanks to Congress’s myopic view and lack of concern for the kind of damages it could pose to small enterprises and farmers, the UPA government agreed to become part of this group. It was evident from the beginning that this could open the floodgates for Chinese goods to enter India. India also did not share favorable terms of trade with other countries of the bloc.

Congress had also compromised with India’s interests in the ASEAN Free Trade Area Agreement (FTA). Even as countries like Indonesia and Vietnam decided to open only 50% and 69% of their market share for India, we decided to open 74% of our commodities for trade. It is imprudent decisions like these that caused us enormous loss in our trades with RCEP countries - from $7 billion in 2004 to $ 78 billion in 2014. In the context of the current exchange rates this translates into losses of Re 5,46,000 crore (2014) from Re 50,000 crore (2004).

Since 2014, Modi government has been constantly working to undo the wrongs of the Congress-led UPA government. In RCEP dialogues, India has always aggressively protected her interests and worked with member countries to agree to favorable conditions, such as opening up of the services sector for the first time for India, higher exports from India, among others.

Congress was so eager to be a part of RCEP that they had conceded that the import duty as applicable on January 1, 2014, would be taken as the base rate, assuming that the Agreement would become operational by 2016. This could have caused havoc for our domestic industries as the 2014 base rate would have led to unhindered imports. Also the import duties on many products have gone up in last few years. A resolute PM Modi argued for 2019 as the base rate!

In the RCEP conference, PM Modi along with Commerce Minister Piyush Goel put forward the interests of farmers, small and medium enterprises, and manufacturing industries, and vigorously asked for amendments which were vital to India’s interest. The most prominent demands were: amendment in tariff differential, changes in base rate for customs duty, changes in the most favored nation rule, asking for exemptions built into ratchet obligations as part of the pact, respecting India’s federal character while determining investments etc. We owe it to the dynamism of PM Modi that India was unwavering in its resolve to bring to fore pertinent issues. During the dialogue, at one point out, of the 70 agenda items, 50 were around concerns of India.

We have begun to evaluate ASEAN and Comprehensive Economic Partnership Agreement (CEPA) with South Korea. We are working on getting into trade relations with Japan, USA, European Union Countries, and other developed nations which shall help us realize the vision of making India a $5Trillion economy and would immensely benefit our farmers, small and medium enterprises and manufacturing sector. We feel that considering growing stature of India under the leadership of PM Modi, RCEP members can’t afford to ignore us for long and will come around to agree to our terms. Meanwhile, we have maintained successful economic relations with ASEAN nations by the means of FTA. By rejecting RCEP we have firmly protected our industries from any adverse effects that Chinese interests could have caused. For us India remains first, and foremost.

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