India’s Act East Policy: RCEP Negotiations and Beyond

After the inception of World Trade Organization (WTO) in 1995, India initially focused on multilateral route for export promotion. However, after conceding defeat in a number of WTO disputes, the country was forced to open up domestic market for foreign players during late nineties. The negotiations during Doha Ministerial (2001) and Cancun Ministerial (2003) meetings of WTO did not lead to the expected level of market access for India. As a result, the country from 2003 onwards had increasingly looked for the possible export markets through preferential trade arrangements. The ‘Look East’ initiative, launched after the 1991 reforms, emerged as a major guiding motive in this regard. The series of ‘East’-centric regional trade agreements (RTAs) since 2010, participation in the Regional Comprehensive Economic Partnership (RCEP) negotiations and subsequent policy shift thorough announcement of ‘Act East’ initiative in 2014 underlined the country’s resolve in this direction. Given this wider background, the current analysis explores the drivers behind India’s recent decision to not join RCEP and the possible economic outcomes.