India pulls out of RCEP deal due to outstanding issues, Farmers Relieved

Modi led Indian Government pulled out of RCEP deal due to outstanding issues. Farmers in India relieved after hearing this news. Farmers were worried about their produce selling for cheaper prices due to cheaper imports without duties under RCEP if the deal would have gone through.

The Withdrawal

On 4th November 2019, the Indian government announced not joining the RCEP deal. The other 15 countries (ASEAN plus Australia, China, Japan, New Zealand and South Korea) will sign the deal in the coming year. The pact would cover one-third of the world’s population.

Currently, 20% of India’s exports go to RCEP countries and it receives 35% of imports from them. India has a trade deficit of $105 billion with around 11 RCEP countries out of which $53 billion is with China. India entered into RCEP negotiations in 2012 under UPA for the first time.


The decision relieved the farmers as a free trade agreement would dominate the Indian market with inexpensive exports. Farmers feared huge dairy exports from Australia and New Zealand. The biggest competition was China that was looking forward to flooding the Indian market with its products. Vietnam and Indonesia have cheap rubber while India is already getting a tough call by spice imports of Sri Lanka. Therefore, India pulling out of RCEP deal was for national interest.

The pact did not allow India to include an ‘auto-trigger mechanism’ that is essential to prevent a sudden increase in cheap imports. Besides, there is no guarantee that India would get access to foreign markets. Also, many experts believed that entering the RCEP pact would mean a greater trade deficit with China because of its production potential.

The Supporters

Union Commerce Minister, Piyush Goyal, praised the PM’s decision declaring it in economic interests and national priorities of India pulling out of RCEP deal. RSS and Swadeshi Jagran Manch showed its gratitude through issuing statements to the media. However, Congress asserted that it is the pressure of farmers that forced the government to pull out of RCEP deal.

To conclude, this deal was a clear game plan of China after its unsuccessful trade agreements with the US. China still welcomes India to join whenever it is ready.

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