A confident India must join RCEP, other trade blocs

India-UK FTA
India must carefully assess and address non-trade obligations under the India-UK FTA to ensure that the final agreement aligns with its economic and strategic interests.

The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement (FTA) that will create the world’s largest trading bloc and mark a significant achievement for China as it battles the US for influence and economic supremacy in the Asia-Pacific region. The agreement was signed on November 15, 2020 by 10 Association of Southeast Asian Nations (ASEAN) members — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam — and six of their trade partners — Australia, China, Japan, South Korea and New Zealand.

India chose to opt out of this trade agreement to protect its manufacturing sector which is recovering from the pandemic. The decision also reflected PM Modi’s clarion call for an Atmanirbhar Bharat, or self-reliant India, and the geopolitical reality between China and India.

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We would like to define Atmanirbhar Bharat as a resilient, confident India embracing the best technologies emerging in the world. We need to embrace them and bring them to converge right here in India. These include initiatives such as:

  • Focus on the most disadvantaged by making universal basic income and services available to all
  • Find and feed every hungry Indian
  • Aim to ensure every grain is consumed or stored safely
  • Food stocks grow in value and respect by consumption, not in poor storage
  • Empower every woman. Employ entire willing woman population by filling up every vacancy in every government and private enterprise. Ensure each one has a smart phone with a self-learning application to enhance skills required
  • Make all last mile irrigation deliver water
  • Ensure completion of all incomplete irrigation projects in the next 6 months in a mission mode
  • Implement strict sanitation laws universally
  • Make available a tap for every home and clean water from every tap
  • 3D print 10 million homes to ensure safe homes for all
  • Reduce inequalities through Implementation of the 4 social security codes
  • Every state government to implement the four social security codes, on wages, social security, industrial relations and occupational safety and health
  • The middleclass will double to 500 million and per capita income will rise dramatically as the only option for India is to raise formal employment.
  • Digitise healthcare: Telemedicine | Vaccination | Home care
  • Every Indian must have a digital record of their genome and their gut microbiome
  • Digitise every person’s health and medicine ingesting history so that diagnosis and medical treatment is done on a personalised basis using telemedicine
  • Move sick care to health care through vaccination
  • Encourage and fund Immunity enhancement through plant extracts
  • Personal hygiene and yoga encouragement at scale
  • Telemedicine infrastructure to ensure home care at scale
  • Quadruple farmer income, engender an agri-preneurial revolution in food and grain trade, and Enable remigration to villages
  • Multi cropping, pulse growing, seed multiplication and vertical agriculture
  • Technology-enabled agriculture: AI-based pesticide delivery, mechanical harvesting, robotic bailing, autonomous tractor, ATVs
  • Establish cold chains
  • Five-fold increase in microfinance and two-wheeler dealerships
  • Ensure universal adoption of National Education Policy
  • Open up education to private and global investments
  • Learning & teaching to be brought to every Indian from the best source in the world
  • Achieve 100% net enrolment ratio in elementary and secondary education through phygital schools in every village in two years, pivot power to 90% renewable energy, Accelerate the journey by decentralising and democratized pricing, preferential tariffs for low level consumptions. All other subsidies must go
  • All power consumption to be metered honestly
  • Average price to go down drastically
  • Deliver decent work for all by bringing accountability to centre stage
  • No permanent tenure to all PSU and GOI employees
  • A life-long learning, continuous improvement and reskilling for relevance to be a continuous, digitalised effort
  • Zero employment exchange pendency
  • Massive industry innovation and technology adoption for 10X productivity
  • A million 4.0 factories making world class flawless products
  • Transform manufacturing to additive from subtractive
  • Robotise and autonomise moving parts
  • Massively scale up the use of AR-VR
  • 3D printed meat to be produced at scale
  • Materials embedded in zombie smokestack plants must be retrieved and redirected to any sector as a source of material for 3-D printing led manufacturing
  • Digital infrastructure for all
  • Make swift and cheap WiFi available at very low latency for all
  • A connected internet devise for every Indian, uninterrupted and at affordable cost
  • Make all rural and urban interventions climate resilient
  • Agricultural production independent of monsoon by 2022
  • Reimagine all spaces, reignite real estate
  • Seamlessly blend multi-use, proportionate ownership and sharing economy ideas
  • Homes should have an office space, a table that can act as a restaurant table, a room for home medical treatment, a game and entertainment zone and a living space
  • Same goes for all factories with added space for R&D
  • Almost every mall, post office or other space to multitask as educational, healthcare, entertainment, training and other engagement space
  • Taxation : Extreme simplification to achieve 35% tax to GDP ratio
  • Simplify personal income tax
  • Make tax filing unnecessary as we pivot to tax determination
  • Ultra-simplification of GST via no exemptions and no composition and comprehensive coverage
  • 3 Rates for entire economic activity: 0,10,15
  • Uniform laws for all states
  • Encourage external trade by pivoting to a simplified and low import duty regime
  • Zero litigation: All unutilized past incentives to be permitted as set off
  • Extremely efficient judiciary with e-courts, robo judges, algorithm-driven decisions, speech to text enablement, and no pendency beyond 6 months

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Once we concentrate our national energies into making ourselves self-reliant and technology enabled, we will be ready to face competition from anywhere in the world. Six months from today will be the right time to enter not only RCEP, but other trade groupings too.

India’s GDP size, her ability to absorb massive doses of investment, robust equity and debt markets and respect for diversity and the rule of law will attract investment flows at unseen levels. While the domestic market must be fully catered to, capacity to export without tariffs both direct and hidden will open up the floodgates for manufacturing to scale.

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India must quietly adopt a policy stance of being tilted towards lowering all trade barriers. Automation and quick movement across International borders must be made a national priority. Adoption of blockchain and simplified documentation are sine qua nons for signalling this change.

After signalling of policy intent must come the actual signing of some pending FTAs with Europe and the US. With the strength and experience of these profound changes internally, a changed policy stand and a few agreements signed, India should enter RCEP. All the significant issues that held us back will be cleared and the invitation especially by Singapore must be accepted. India must and will emerge competitive, confident, technology enabled and ready to do business with the world.

(Shailesh Haribhakti is corporate leader based in Mumbai. He is a chartered and cost accountant, and writes regularly on the Indian economy and public policy.)

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Shailesh Haribhakti is a Chartered and Cost Accountant, an internal auditor and a certified financial planner. He is a board chairman, audit committee chair and independent director at some of the country's most preeminent organisations. He is a thought leader on the Indian economy and public policy.