India: Why Workers should reject RCEP – Unions For Trade Justice

India: Why Workers should reject RCEP

Pamphlet by Forum Against FTAs

In order to protect domestic production from imports, countries use import duties. RCEP requires member countries to drastically reduce import duties to between 0 and 3%. Compared to other countries in RCEP, India has higher import duties, at an average of 10% for goods and 32.5% for agricultural products. This reduction of duties would also apply to India’s trade with China, as a member of RCEP. India has a large trade deficit (INR 3.45 lakh crores in 2015-16) with China, which will increase after RCEP. Companies producing steel and heavy machinery have already raised the concern that this would lead to displacing of local manufacturing by Chinese imports.

Pressure on these sectors due to increased imports will lead to management decreasing wages, using contract work and retrenching workers. Sectors such as garment, ceramics and electronics will also face negative impacts due to cheaper Chinese imports. RCEP will allow e-commerce giants such as Alibaba to sell freely in the country, thereby threatening local products and job creation.