Indian Govt. has decided not to sign the agreement on Regional Comprehensive Economic Partnership (RCEP) for the time being while other fifteen countries have decided to proceed with the Agreement. Prime Minister Narendra Modi is reported to have remarked that the deal in its present form fails to reflect the basic spirit of RCEP. The statement issued by the RCEP countries noted, “India has significant outstanding issues, which remain unresolved.”
There was widespread opposition to RCEP agreement in the country. This free trade agreement between 10 ASEAN countries with their six free trade partners, namely Japan, China, South Korea, Australia, New Zealand and India is bound to seriously affect domestic producers in agriculture, diary and industrial manufacturing. People of the country including organizations of peasantry, milk producers and even bodies of industries had opposed the signing of this agreement. Despite this widespread opposition, Indian Govt.’s refusal to sign the agreement does not primarily due to this opposition of the people. Indian rulers are used to trample people’s interests under feet. If this were so, Modi Govt. would have made that clear from the beginning as the provisions of the Agreement are clear. Further there is no need to keep the doors open for the future as the 15 countries have decided to proceed ahead despite India and text based negotiations i.e. framing of ground rules have been completed. Future negotiations would not mean renegotiations of these principles but only some “give and take” in the tariff lines. It is worth recalling that Narsimha Rao led Congress minority Govt. had signed the WTO agreement despite countrywide protests against it. But there was a vital difference. All the imperialist countries were united on the WTO then as that is not the case with RCEP.
The real reason of Modi led RSS-BJP Govt. is the opposition of US imperialism to this agreement. Contradictions among imperialist powers are intensifying and trade war is unfolding between USA and China. US imperialism signaled its opposition to the Agreement. It was also apparent from the fact that neither President Trump nor Vice-President Pence chose to attend the meeting sending trade secretary in their place. US hand behind the delay caused in RCEP was pointed out by several leaders but most clearly by Malaysian leader Mahathir Mohammed. Modi led RSS-BJP Govt. has demonstrated its tilt towards US and its allies on a number of occasions. It was much in evidence in recently held “Davos in Desert” organized by Saudi Crown Prince Salman.
Asia has become a battle ground between US imperialism and Chinese Social-imperialism. Recognizing the need to combat the rising influence of China in Asia, Obama Admn. had coined “Pivot to Asia” which envisaged a large part of its military to Asia to contain China. Along with this went “Trans Pacific Partnership (TPP)”, a large trading bloc encompassing countries with nearly half of the global GDP. Pitting India against China has also been an important component of this strategy of US imperialism. Trump Admn. has torn down TPP retaining military component of the “Contain China” policy along with snaring India into this new coined “Indo-Pacific Region” thus signaling importance of India in this strategy.
With US tearing down TPP, the negotiations for the regional bloc without US gained momentum though the process was initiated in 2012. With the rise of protectionism in US under Trump, even the US allies like Japan, South Korea, Australia and New Zealand looked towards China and ASEAN countries to enhance their trade and overcome stagnation in their economies. On the other hand, India wary of the influence exercised by China and egged on by the US imperialism, delayed the process. However, patience of other countries ran thin and they chose to go ahead with RCEP without India. It was precisely for delivering this message that China’s Xi had recently come to Mamallapuram in Tamilnadu to meet Modi.
Though Modi led RSS-BJP and their apologists would claim to keep India’s interests above everything for not signing RCEP agreement but the whole performance of RSS-BJP proves otherwise. Whatever taxes they had increased on the foreign companies they meekly withdrew. They opened coal mining in India to 100% foreign ownership. They waived off the requirement of 30% purchase from domestic sources for single brand retail. These are only some of the measures recently taken. In fact the increase in customs duties over the last two years, which were diluted and waived off under different pretexts were only to increase the base duties for the purpose of RCEP negotiations and not in the interest of domestic production. They have been trying to entice foreign capital with lower wages, lower taxes and open loot of the natural resources. This is the essence of their “Make in India”. Hence, their refusal to sign the RCEP has little to do with the protection of agriculture, diary and manufacturing and everything to do with their desire to align with US imperialism particularly against China.
The fact is that a large country like India cannot develop by dependence on the foreign markets or foreign investments. Export dependent and FDI driven model of development pursued by the successive govts. in India was only to reinforce the rule of big comprador capitalists and big landlords. There was no attempt to increase the purchasing power of the people which meant improvement in their standard of living or in the domestic production which called for freeing the country from imperialist yoke and semi-feudal fetters. This model has been crisis ridden and periodic attempts to tide over the crisis by further increasing the stranglehold of foreign capital provided only temporary respite to the rulers leading to further aggravation of the crisis. Modi Govt. is pursuing the same model only increasing the dependence of the country, exploitation of its toiling people, workers and peasants, and of the natural resources of the country. No large country like India has developed taking this course of dependence without undertaking restructuring of its society.
Modi led RSS-BJP Govt. has led the country to tighter embrace of the US and its allies. Indian ruling classes view China as rival to their regional ambitions which they hope to realize under the tutelage of US imperialism and its allies. While they keep their relations with Russian imperialism, and this has no contradiction with the current ruling dispensation in Washington. In the unfolding trade war they wish to draw closer to US so as to make India a favoured destination of capital from US and its allies. In this even the Congress leadership is in the loop. Former Prime Minister Manmohan Singh, in the course of recently concluded assembly elections, while criticizing Modi Govt.’s performance had advised the Govt. to utilize the trade war between US and China.
While Indian people and organizations of different sections had demanded Indian Govt. not to sign RCEP, they should be alert to the policies of the Modi Govt. against Indian producers and particularly working masses. Modi Govt. is planning to sign further deal with US imperialism which will have adverse effect on a number of sectors. A powerful movement should be built against domination of foreign capital and their compradors in different sectors.
Modi Govt. has made clear that it would pursue RCEP to pursue the changes it seeks. But the real intent is to keep the door open to provide for the trade deal between USA and China on which the Govts. of these countries are negotiating. Compradors are covering their tracks so that they are not caught off-guard.