As India finalizes its negotiating position on the Regional Comprehensive Economic Partnership (RCEP), concern regarding the consequences for Indian Industry and Agriculture is mounting.
India already has Free Trade Agreements (FTAs) with several RCEP members – Korea, Japan, and the ASEAN. Electoral compulsions will stymie any opening up of the Dairy Sector to Australia and New Zealand. The only country, therefore, to significantly benefit from India joining the RCEP will be China, which has a zero-sum economic strategy.
A Parliamentary Standing Committee report on the Chinese threat to the Indian industry, which is worth reading in full, outlines the damage inflicted on India’s manufacturing sector by unfair Chinese trade practices, under-bidding, and dumping.
Chinese under-bidding by anything between 30-70% has resulted in Chinese companies winning telecom tenders for sensitive government networks operated by BSNL, Railtel, Power grid Corporation of India, and Oil & Gas companies – and securing a huge strategic advantage over India.
Predatory Chinese pricing has resulted in an unsustainable trade imbalance in telecom/ICT, with over 50% of $21.5 bn telecom imports coming from China in FY18, and nil exports from Indian companies. This has grave consequences for India’s high-tech ICT (including telecom) companies, some of which are 10 years ahead of their MNC rivals – and has endangered national security since China’s Information Warfare is conducted through ICT networks.
Chinese companies moreover enjoy billions of dollars in State R&D subsidies – proscribed under the WTO. Under just one program for Strategic Emerging Industries – China reportedly committed $1.5 trillion in 2010 for domestic R&D support, with hundreds of billions more committed under “Made in China 2025”. Opening our high-tech sectors to heavily state-subsidized competition gives China free rein to undermine our security and destroy our companies.