The pact would be suicidal: Jairam

Why is the Congress opposing the RCEP?

After demonetisation and a flawed Goods and Services Tax, the RCEP will prove to be the third biggest jolt to the Indian economy. Signing the RCEP would be suicidal for India. It will devastate our already strained agriculture sector and small and medium industry. It will finish our farmers and fishermen. The bottomline of this FTA is liberalisation of imports from China. We don’t know what transpired in the informal summits between Prime Minister Narendra Modi and Chinese President Xi Jinping in Wuhan and Mahabalipuram. But we can see the outcome. 

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• What can happen
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What are your specific objections to the RCEP?

It’s a threat to Indian agriculture, particularly the dairy industry. Signing the RCEP would mean opening up our huge market to cheap imported dairy products from New Zealand; wheat, sugar and dairy items from Australia and other such stuff. Chairman of Amul RS Sodhi recently wrote to Commerce Minister Piyush Goyal urging the government to exempt Indian dairy from the scope of RCEP. He argued how New Zealand, an overproducer of milk, has been eyeing the Indian market for long and how if all RCEP nations do the same, domestic milk production would collapse and India would become a net importer of dairy products at the cost of local producers.

Likewise, if other cheap products too flood Indian markets, what will become of the local industry?

But the UPA also negotiated FTAs in its time.

We are not doing U-turns here. When the UPA negotiated free trade agreements, the economy was booming. There was an investment boom, exports were growing. Today exports are falling, investment is falling. The economic context is not conducive to any FTA.

Why are you particularly wary of China?

Because we already have a huge trade deficit with China and RCEP will fuel the imbalance further. China is an integral part of RCEP and according to the agreement, 90 per cent of India’s import tariff lines are going to be liberalised. China will be the biggest beneficiary of RCEP. We negotiated free trade agreements with ASEAN. We had Singapore and we had Sri Lanka. Never did we contemplate an agreement which would liberalise imports from China. 

Any other anxieties about the RCEP?

Past understanding has been that India will agree to free data flow under any FTA subject to national and security interests. The words “national interest” are missing from the draft RCEP. The text is against Indian farmers, industrialists, fishermen and economy. — Aditi Tandon