Why in news?
India's "RCEP minus China" strategy has gained prominence following the recent conclusion of the India-New Zealand Free Trade Agreement (FTA) in December 2025, allowing India to secure market access with all 15 RCEP members except China. This approach builds on India's 2019 decision to exit the Regional Comprehensive Economic Partnership (RCEP) due to concerns over cheap Chinese imports flooding markets and widening trade deficits.
About RCEP?
- RCEP (Regional Comprehensive Economic Partnership) is the world’s largest trade bloc, comprising:
- 10 ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam)
- Plus Australia, China, Japan, South Korea, and New Zealand.
- It was signed in November 2020, but India withdrew in 2019, citing concerns about cheap imports from China hurting domestic industries.
India’s “RCEP Minus China” Strategy
- India opted out of RCEP in 2019 to avoid the “China risk” — fears of trade imbalances and flooding of Indian markets with Chinese goods.
- Instead, India pursued bilateral Free Trade Agreements (FTAs) with individual RCEP members:
- Already has FTAs with ASEAN, Japan, South Korea, Australia.
- Recently concluded an FTA with New Zealand (Dec 2025).
- With this, India now has trade deals with every RCEP member except China, effectively creating an “RCEP minus China” framework.
Importance
- Economic Gains: India secures most benefits of RCEP (market access, integration) without formally joining.
- Strategic Autonomy: Maintains independence in trade policy, avoiding overdependence on China.
- Geopolitical Balance: Strengthens ties with ASEAN, Japan, Australia, and others, while countering China’s influence in the Indo-Pacific.
- Domestic Safeguards: Protects Indian MSMEs and agriculture from being overwhelmed by Chinese imports.
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