RCEP exposes inefficiency of Indian political system
Economic issues appear to be the reason behind India’s recent decision not to go on board the Regional Comprehensive Economic Partnership (RCEP) agreement. The real reason, however, is India’s political system.
In September, New Delhi invited representatives of RCEP members to discuss the mega trade deal in India. After India announced its exit from RCEP talks on Monday, the country’s Commerce and Industry Minister Piyush Goyal indicated that his country was still open to negotiations. These are signals New Delhi wishes to join the pact after all. Yet opposition to the deal in India have turned out to be a stumbling block.
“A forceful opposition by Congress and Rahul Gandhi ensures that the BJP government backs down” from signing the RCEP, said Indian Congress chief spokesperson Randeep Surjewala. Not only that, various political parties and social groups have launched protests against RCEP in recent months.
The regional trade agreement has been highly politicized in India. Long-term interests do not matter anymore and Modi has no alternative but to turn the multilateral negotiations into a choice whether to safeguard his approval rate.
In the past years, the more free trade agreements India signs with surrounding countries, the bigger India’s trade deficit becomes. The phenomenon is proof that India is in need of reforms to boost its competiveness. Joining the RCEP could help India further integrate into the regional and global industrial chain, gain more economic profits by taking advantage of its large population as well as markets, and promote its domestic economic reforms. Modi knows this. So does Goyal. But they are helpless in the face of domestic political pressure. India’s potential is trapped by its system.
Take infrastructure construction. The proposal over the high-speed rail connecting Mumbai and Ahmedabad, Gujarat, India’s first high-speed rail line, was approved in 2015. But the construction is expected to begin in 2020 because land acquisition procedures are slowed by resistance from local farmers. Think about how many high-speed rail lines there are in China, which took 39 months to build the Beijing–Shanghai highspeed railway, from designing the project to completing it. This is China’s efficiency.
India, the world’s largest democracy, is witnessing increasingly fierce political infighting. In the meantime, China has shaped a strong national consensus and has been concentrating on developing the sectors that meet the welfare of the majority of people first. It’s a long-held misperception of the West on China – Chinese policies are rigid and under the leadership of the Communist Party of China, so the country won’t realize reform and opening-up. However, it is precisely because of the Party carrying out profound reforms, which advance with the times, has the country’s potential been explored.
It is normal to encounter resistance during the process of reforms. The Chinese President once said, “When it comes to the toughest reforms, only those with courage will carry the day.” Yet given India’s political system, Modi may not have the courage to promote tough reforms due to huge political risks.
New Delhi is suffering from record levels of smog. Indian media are questioning “why what worked for China does not work in India.” It’s time for India to make some introspection on its own system.