Topic – Effects of liberalization on the economy
4) The experience of India with FTAs have taught us that we should proceed with extreme caution when it comes to RCEP negotiations. Analyze. (250 words)
Why this question
As RCEP negotiations with China gather pace, doubts over the efficacy of FTAs for India has been pointed out by several analysts. Moreover, in light of the growing trade deficit with China, RCEP negotiations assume much greater significance.
Key demand of the question
The question demands the answer to the following points incorporated in your answer
- Examine the experience of India with FTAs. Bring out the positive and the negative impacts that FTAs have had on India’s trade balance, imports and exports.
- Discuss the critical points of contention in RCEP negotiations both region wise and issue wise
- Highlight the risks that are there for India in case of a bad decision and thus the need to proceed with caution
- Discuss how India should approach the RCEP negotiations
Analyze – When asked to analyze, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary.
Structure of the answer
Introduction – Mention that RCEP negotiations are upcoming which is a regional FTA. India has become a part of many regional and bilateral FTAs which have led to several issues which needs to be discussed before proceeding with RCEP.
- Highlight the benefits and losses of so many FTAs. In benefits bring out macro points like greater trade volume, price advantages due to duty waiver etc. Thereafter delve deeper into the impact of FTA on India by analysing the results of ASEAN FTA etc , take points from the economic times article
- Thereafter, focus on bringing out the major points of contention in RCEP negotiations. Discuss the major issues and also discuss specific issues wrt certain countries like China
- Bring out the risks that a faulty negotiation strategy has for India and this would prove why is it necessary to proceed with caution.
- Discuss a way forward for india’s negotiation strategy at RCEP
Conclusion – Present your view on FTA in general and RCEP in particular and how should India go ahead with them.