The World Bank’s suggestion that India should reconsider joining the Regional Comprehensive Economic Partnership (RCEP) is based on flawed assumptions and outdated estimates, research institute GTRI said on Wednesday.
The Global Trade Research Initiative (GTRI) said policy decisions for developing countries like India must be based on real-world data and a thorough understanding of the long-term implications. The growing trade deficit among RCEP members and the over-reliance on China-centric supply chains underscore the importance of a cautious, well-informed approach.
India pulled out of RCEP in 2019 after joining the talks in 2013. RCEP comprises 10 ASEAN group members Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, Philippines, Laos and Vietnam and their six FTA (free trade agreement) partners China, Japan, South Korea, Australia and New Zealand.
It said, the World Bank should focus on in-depth and data-based analysis. The specific challenges and economic conditions of developing countries should be considered before offering solutions based only on economic models. Economic models should be only one factor.
Ajay Srivastava, founder of GTRI, said, “The World Bank’s suggestion for India to reconsider joining RCEP is based on flawed assumptions and outdated estimates.”
The World Bank in its ‘India Development Update’ (IDU) report on India’s trade opportunities in the changing global context suggested that India may reconsider regional integration options, including its position on RCEP.
Srivastava said, “Important factors were ignored in the suggestion. This can have a significant impact on India’s economic strategy and self-reliance goals.”
He said India’s decision not to join RCEP was strategically correct. However, the core concerns that led India to decide to exit RCEP in 2019 still persist and have been exacerbated by subsequent developments.
India already has free trade agreements (FTAs) with 13 of the 15 RCEP members, apart from New Zealand and China.
