What is RCEP and why are farmers, Dairy Industry protesting against it?

Several experts also believe that though RCEP is a big leap for India, it is not yet prepared for it and should hold off RCEP agreement.

Prime Minister Modi is in Thailand and he is attending three very important summits there- the ASEAN-India summit, The East Asia Summit and very important RCEP summit. Well, ahead of India’s participation in the RCEP summit, many protests are erupting back home. Especially the farmers and the small traders are not happy with India signing the free trade agreement.
The All India Kisan Sangharsh Coordination Committee (AIKSCC), a coalition of over 250 farmer organisations in the country, held a nationwide protest on Monday to warn the government against going ahead with the inclusion of agriculture in the RCEP free trade agreement.

On Sunday, Congress interim president Sonia Gandhi also said that the RCEP agreement will be a body blow to the Indian Economy. Countering her Commerce minister Piyush Goyal who gave a thumbs up to the RCEP agreement questioned where was Sonia Gandhi when India was forced to join the RCEP free trade agreement by the UPA government.
Several dairy farmers protested against this but PM Modi has assured that India will not sign the deal unless its concerns are fully accommodated. Now all eyes are on the summit that will be held in Bangkok.

What exactly is RCEP?

RCEP is an acronym for Regional Comprehensive Economic programme Which is a massive free trade agreement between the countries. The free trade agreement would mean that two or more countries will make the import-export hassle-free and obstruction-free. It will mean there will be less number of processes involved in the import-export. This will also impact the tariffs imposed on the goods. Usually, a free trade agreement also implies that there are little to no tariffs, quotas.

The negotiations on the FTA have been going on since 2013, now the agreement has neared completion. Thailand PM today said that Asian countries had held conclusive talks on what could be the world’s biggest trade pact and there would be an announcement of success at a summit in Bangkok despite doubts raised by India.

How many countries are participating in the FTA?

There are 16 nations that are involved in RCEP including the 10 ASEAN countries- which India is a part of. They are- Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, Myanmar, Brunei, Cambodia, Laos — and the six countries these countries have free-trade agreements with — Australia, China, India, Japan, New Zealand and Korea.
10 ASEAN Countries in RCEP
Six other countries in the RCEP agreement

These nations house 50% of the world’s population. They represent 25% of global GDP, 30% of global trade and 26% of foreign direct investment flows.

What the 16 RCEP nations represent?
As per Piyush Goyal, the free trade agreement is strategically important for India. He had at an event in Nagpur said that If India remains out of RCEP, we will be left isolated from this large trading bloc. The trade among RCEP countries is about $2.8 trillion. But domestic Industries are not very happy about it. Especially the agriculture and dairy sector and their concerns are not unfounded.

Dairy Industry:

The dairy industry is very important in Indian rural economy. India ranks first in milk production, accounting for 20 per cent of world production. The dairy sector in India grew at a rate of 6.4 per cent annually in the last four years against the global growth rate of 1.7 per cent.
The Indian dairy sector is the largest contributor to the agricultural Gross Domestic Product. The 2018-19 Economic Survey says that more than 50% of India’s Dairy sector is run by the unorganized sector which means local farmers or those involved only in the dairy business.
Indian Dairy industry’s growth in 2018-19
If you look at the industry players, they are mostly homegrown brands like Amul, Mahanand, Aarey, Gokul etc. Free trade would mean foreign players entering the market big time and it would threaten the Indian brands. Indian dairy players wouldn’t be able to match up to the competitive market and eventually will lead to losing their jobs.
Even the RSS affiliated Swadeshi Jagran Manch has raised objection over the RCEP deal. HW News talked to the Swadeshi Jagran Manch’s Deepak Sharma. According to him, if foreign players enter the market as many as 5 crore people would lose their jobs.
Sharma said,

“India’s trade deficit with ASEAN countries stands at $7.7 Billion. There are 16 countries in RCEP including India. In 5 years, by March 31, 2014, the trade deficit increased by $ 0.4 Billion and became $8.1 billion.”


“After that, we welcomed ASEAN countries, China with open arms. On March 31, 2019, the trade deficit with ASEAN countries increased by $13.8 Billion and stood at $21.9 Billion.”

“If we look at all the other 15 RCEP countries, we have a trade deficit with all of them. Despite tariff, the trade deficit is increasing rapidly. If RCEP agreement is signed then 74-90% goods will come under zero-tariff. After tariff removal, our losses will be alarming,” he added.


The country in the past has witnessed several massive farm protests. Especially demanding increased MSP and subsidy and loan waivers. At this point what India needs is a reform in the agriculture sector. But RCEP will unleash disaster.
United Planters’ Association of Southern India, an apex body of planters of tea, coffee, rubber, cardamom and pepper conducted a study. The study says with RCEP the products will be under intense competition and imports into the country will likely increase over time.
Just like Dairy, India’s Agri sector is mostly unorganized too. this will have a massive negative impact on them. HW News spoke to Prem Singh Gehlawat who is affiliated with All India Kisan Sanghash coordination committee. He said that while in other countries governments have been heavily subsidising crop inputs, these facilities are not provided in India and thus Indian farmers are ill-prepared to compete in world markets.

Gehlawat questioned, “This is going on since Manmohan Singh’s tenure. ‘The entire world is a village’ belief, anyone can sell their product anywhere.”

“In other countries, heavy subsidies are given wheat they send their product to other countries free (without tariff) and here out Wheat crop is already running into losses. How would we sell it to other countries?”

The RCEP proposes that 92% of India’s goods would be tariff-free over the next 15 years. Most countries wanted India to slash existing tariffs on up to 90% of all goods. Most of these countries are the ones with whom India has a trade deficit which means we import from them more than we export to them. And china tops the list. Though the government has been saying that it will keep the domestic interests in mind, the farmers and dairy industry are suspicious.
Several experts also believe that though RCEP is a big leap for India, it is not yet prepared for it and should hold off RCEP agreement.
Dear Readers,
As an independent media platform, we do not take advertisements from governments and corporate houses. It is you, our readers, who have supported us on our journey to do honest and unbiased journalism. Please contribute, so that we can continue to do the same in future.

Related posts