RCEP stance: Goyal reiterates India’s 2019 opt-out

Why RCEP is back in the policy spotlight

Commerce and Industry Minister Piyush Goyal has reiterated that India will not join the Regional Comprehensive Economic Partnership (RCEP), arguing the bloc’s structure does not suit India’s national interest. He described the proposed pact as “irrational” and “lopsided,” saying it failed to serve India’s interests and would have widened the trade deficit. The minister’s comments revive a long-running debate around India’s trade strategy, particularly its approach to mega trade blocs that include China. Goyal also used the opportunity to criticise the Congress party and its allies for pursuing RCEP negotiations in the past. He called those talks the “worst and most anti-India decision” that could have been taken, according to remarks cited in multiple reports.

Goyal’s core argument: RCEP would resemble an FTA with China

Goyal’s central claim is that joining RCEP would have effectively resulted in a free trade agreement with China, even if it was formally a broader regional pact. He said the agreement would have opened Indian markets to predatory pricing and “dumping” of overcapacities, placing pressure on domestic producers. In his telling, the sectors most exposed would have been farmers, MSMEs, and the automobile industry, which he said could have faced a sharp rise in low-priced imports. He also argued that the deal would have weakened India’s domestic manufacturing push, stating it would have “completely demolished the Make in India story.” The minister framed the issue as a competition challenge against what he described as a “non-transparent economy,” in reference to China’s trade practices.

The 2019 decision and India’s unchanged position

India announced in 2019 that it would not join RCEP, citing unresolved “core interest” issues and concerns that the pact did not address India’s priorities. Goyal has said there has been no change in that position since then. In a written reply to the Rajya Sabha, he stated that the structure of RCEP did not adequately address the ambitions and concerns of India’s stakeholders. He referred to India’s stance being conveyed during the third RCEP Leaders Summit on November 4, 2019, in Bangkok. He credited Prime Minister Narendra Modi for announcing India’s decision to stay out of the agreement at that summit.

Existing FTAs and the “outlier” argument within RCEP

Goyal also pointed to India’s existing network of trade agreements to argue that RCEP’s incremental benefits were limited while the risks were high. He noted that RCEP is a grouping of 15 countries and that India already had an FTA with the 10 ASEAN countries. He further said that with Japan and South Korea included, India already had FTAs with 12 of the 15 RCEP members. India was, in his words, at an “advanced stage” of negotiation but “aborted” the process. Separately, he claimed India was “forced to join” the RCEP negotiation process by executive action of the earlier government.

Criticism of Congress-era FTAs with Japan and South Korea

Alongside the RCEP critique, Goyal targeted earlier trade pacts with Japan and South Korea. He said Indian exports to these countries “have hardly grown” after the FTAs, while imports increased. He also said Indian businesses still face difficulties exporting to Japan and South Korea, suggesting market access barriers remain a practical problem even after trade agreements. The FTA with South Korea was implemented in January 2010, and the agreement with Japan in August 2011, according to the information cited alongside his remarks. Goyal’s comments position these pacts as cautionary examples of agreements that, in his view, did not deliver balanced outcomes.

China trade deficit numbers cited by the minister

Goyal supported his broader argument by contrasting India’s trade deficit trajectory with China across two decades. He said India reduced import duties during 2004 to 2014, which he argued helped China “dump goods into India.” He stated that India’s trade deficit with China increased at a compounded annual growth rate (CAGR) of 42.85% between 2004 and 2014. He also cited a much slower 6.45% CAGR in the deficit between 2014 and 2024. In another remark quoted in the provided text, he described the deficit rising from USD 500 million to USD 48 billion between 2004 and 2014.

What Goyal said about the US, China, and skewed trade

At a session involving Chinese and US trade ministers, Goyal said India’s “heart” is with Washington and suggested the US relationship is more favourable, while warning that joining RCEP would have widened the deficit with China. He said bilateral trade with China is “already” about USD 130 billion and “largely skewed in favour of China.” In that context, he argued that RCEP might have raised overall trade flows, but mainly by increasing the deficit further. He also criticised China’s alleged use of World Trade Organization rules to flood markets with low-priced goods that “often do not meet quality standards,” as cited in the provided material.

Key facts and dates at a glance

Market impact: why these comments matter for trade-sensitive sectors

Goyal’s repeated framing of RCEP as China-centric keeps the focus on sectors that are politically and economically sensitive, including agriculture, dairy, MSMEs, and autos. His argument is that any agreement that increases exposure to low-priced imports without strong safeguards can raise stress for domestic producers and widen the trade deficit. By highlighting weak export outcomes in the Japan and South Korea FTAs, he also signals a preference for more enforceable market access and fewer non-tariff barriers. He has said India is only interested in free trade agreements characterised by “fair play” and “transparent transactions,” rather than those led by China. For listed companies, the policy tone matters most for import-competing manufacturers and for firms dependent on stable trade rules.

Analysis: the policy line India is drawing on mega trade pacts

The minister’s messaging consistently links trade agreements to domestic manufacturing resilience and the balance of trade. His use of deficit growth rates and bilateral trade figures is aimed at reinforcing a risk-based approach to large blocs like RCEP, especially where China is a central participant. The emphasis on “rule of law,” transparency, and dispute mechanisms also reflects concerns about enforcement and recourse, which he has referenced while criticising the idea of signing an agreement “without a court of appeal.” At the same time, his critique of older FTAs suggests that India is evaluating whether trade pacts translate into real export outcomes, not just lower tariffs. This framing aligns with the government’s stated preference for “balanced” and “mutually beneficial” agreements.

Conclusion

Goyal has again ruled out India joining RCEP, arguing the pact would have increased dependence on imports and widened the trade deficit, particularly with China. He has also criticised Congress-era FTAs with Japan and South Korea, saying exports saw minimal growth while imports rose. India’s decision to stay out of RCEP was conveyed at the Bangkok leaders’ summit in November 2019, and the minister says there has been no shift since then. The next signals for markets will come from how India structures future trade negotiations around the “balanced, ambitious, comprehensive, and mutually beneficial” framework the minister has referenced.