India mulls trade pact with US in “strategic shift”
A day after opting out of the Regional Comprehensive Economic Partnership (RCEP), the Indian government said on Tuesday is was exploring a trade agreement with the US, according to the Times of India.
It quoted sources as describing the move as a “strategic shift” by the Modi government.
“At present, India is exploring trade agreements with the USA and the European Union, where Indian industry and services will be competitive and benefit from access to large developed markets,” it quoted Commerce and Industry Minister Piyush Goyal as saying.
It said for years India has shot down suggestions of a free trade agreement with the US and denied that there was any move when President Trump hinted at it in a tweet a few months ago.
Goyal, however, said the Indian government was in no rush and would only sign a trade agreement which safeguarded its interests.
Meanwhile, Indian farmers and businesses on Tuesday hailed Prime Minister Narendra Modi’s decision to opt out of RCEP, with the country’s largest dairy producer Amul thanking the premier for “supporting livelihoods”, AFP reported.
New Delhi’s 11th-hour rejection of RCEP — which was meant to account for 30 per cent of global GDP and loop in half the world’s population — comes as India battles slowing manufacturing and consumption.
The pact would have increased India’s access to other Asian markets, but New Delhi feared its domestic industries would be hit hard if the country was flooded with cheap made-in-China goods, particularly in key employment sectors such as agriculture and textiles.
In a tweet late on Monday, Amul applauded Modi’s “exemplary leadership and support” to dairy farmers, who would have been exposed to more competition under the RCEP.
“Your vision of supporting their livelihood will help in doubling their incomes and make India stronger,” it said.
Praveen Khandelwal, secretary general of the leading lobby group, Confederation of All India Traders (CAIT), released a statement to AFP warning the deal would have allowed Chinese manufacturers to overwhelm “the Indian market with Made In China products at very low prices… thereby creating a disequilibrium”.
- M. Singh, convenor of the All India Kisan Sangharsh Coordination Committee, said the rejection of the deal was “a huge victory for farmers”.