Global Economy

India made a big mistake in not joining the RCEP: Arvind Panagariya

Renowned economists have called India’s withdrawal from RCEP as a big mistake urging the nation to continue engaging with partners to conclude the deal as it will open up a lot of trade opportunities for the country.

“India should continue to engage with Asia Pacific partners and get into RCEP as it prepares to take over the multinational companies from China in areas of textiles, footwear and other labour intensive sectors,” Arvind Pangariya, professor of economics at Columbia University and former vice chairman of NITI Aayog, said.

“India made a big mistake in not joining the RCEP because this is an economic group catering to 3.2 billion people,” Jeffrey Sachs, director of sustainable development, Columbia University said.

“The Asia-Pacific region of 15 countries have the epidemic mostly under control barring the exception of India and Indonesia, which means the RCEP could have opened up among itself first,” Sachs added.

Pangariya and Sachs were addressing the CII Annual General Meeting on Tuesday on a more sustainable global economy post Covid-19.

Laying the roadmap for India to be better positioned to attract investments, Panagariya said the India should open up more, knock down all tariffs it introduced in last three years to go down to 7% on all items, forge agreements with RCEP, EU and maybe the US and set up Shenzhen-style coastal employment zones to boost manufacturing and creating employment.

According to Panagariya, there will be greater globalisation post Covid-19 pandemic in terms of integration of labour markets. “Boundaries of the labour market will extend beyond H1 B visa as workers will work from their remote countries,” he said, adding India could emerge as winner if it brings in major reforms in the education sector.

Sachs, however, warned India should not side with the US in its anti-China stand and instead should deepen its relationship with its neighbour. “Continue to be an open economy and don’t join the foolishness of the US to sideline China. Instead, cooperate with China and every other country,” he added.


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