Unnecessary Alarm: India’s Farmers, RCEP and ASEAN

For example, while Indian agriculture is frequently asserted to have suffered in the wake of the ASEAN agreement, a quick glance at the tariff schedules for India under the deal shows clearly that most key items, including apples, were placed on the exclusion list (EL).  This means that the ASEAN-India (AIFTA) agreement made no changes to existing tariffs. The 50% tariff on apples into India from 9 ASEAN member states still exists—even after full implementation of AIFTA.  Philippines has a separate tariff schedule with India in AIFTA and apples are also on the EL.  Apple exports from ASEAN to India may have grown in the wake of AIFTA, but it was not as a direct result of any changes to tariff levels in the agreement.  Hence AIFTA cannot be blamed as a cause of competitiveness problems in India’s apple orchards.

India’s Agriculture and RCEP

This was the case with AIFTA, in which despite the elimination of tariffs for about four thousand products, sensitive and high growth industries were included under the Sensitive—tariffs to be reduced to 5%--and Exclusion—no elimination of tariffs—lists; both of which largely cover agricultural products. More specifically, at the time of implementation the number of products under the Exclusion/Sensitive lists was higher than the number of tariff lines for ASEAN and world imports into India. These duty concessions signalled an implicit protection against the future engagement or the expansion of agricultural imports.  In other words, India essentially put nearly all agricultural items that might have been imported from ASEAN countries into categories that did not receive tariff reductions.  Hence, whatever increased import competition Indian agricultural producers have faced from ASEAN competitors in the wake of AIFTA cannot have been the result of duty reductions produced by the FTA itself.