Go Back to RCEP: Times of India

As strong emerging economies, India and China understand smaller Asian markets. For example, India manufactures more than 90 percent of the three-wheel auto rickshaws sold in 10 Association of Southeast Asian Nations Despite such success and high expectations for the Modi government, India resists opening its economy to the Regional Comprehensive Economic Partnership, or RCEP. “After seven years of negotiation to join a mega free trade bloc, India confessed it was too unprepared to open up to competition,” explains Nayan Chanda in his column for the Times of India. Chanda is also YaleGlobal’s founding editor. “Unless India stiffens its spine and accepts the challenge to modernize its economy, it will end up decoupling itself from the most vibrant part of the global economy and sink back into the obscurity of the licence raj.” The license raj system refers to complex regulations and bureaucracy that stymied vibrant new businesses after India’s independence. Some trade advocates suggest that India just needs more time to plan for low-cost goods from China and Australia. Market competition strengthens individual firms. Protectionism on India’s part will force consumers to pay high prices and weaken any competitive advantage. Asia would be stronger for sweeping market reforms. – YaleGlobal