Indian government decision stay out of the largest Regional Comprehensive Economic Partnership (RCEP) signed on November 15 by 15 Asia-Pacific countries, could fare well for domestic steel producers in the long run, industry experts told Davis Index.
Indian steel producers are not that dependent on exports and opting out of RCEP should not materially impact India’s long-term investment and exports plans,.
India is the second largest producers of steel after China in the world and is considered to be a potential and fast-growing market in terms of steel consumption. Domestic steel producers would be severely impacted if world’s top steel producers dump steel products in India at prices lower than local steel prices.
Fifteen nations namely China, Japan, Australia, New Zealand, South Korea, and ASEAN countries (Indonesia, Malaysia, Singapore, Thailand, Vietnam, Myanmar, Cambodia, the Philippines, Brunei and Laos) signed the RCEP agreement on November 15 – one of the largest free trade agreements in history.
Escalated tension with China is considered to be a major reason for India’s decision to exit RCEP discussions. India’s decision aims to safeguard the interests of many industries including steel and to give an advantage to the country’s services sector.
RCEP aims to create an integrated market where it is easier for products and services of member countries to be accessed across the region. It will connect about 30pc of the world’s people and could add $209bn annually to world incomes, and $500bn to world trade by 2030.