Domestic Sources of India’s Trade Policy Preferences in RCEP Negotiations

Abstract

After negotiating for seven years, fifteen member countries of the Regional Comprehensive Economic Partnership (RCEP) agreement concluded text-based negotiations on 4 November 2019 at a summit held in Bangkok, conveying that participants will sign the agreement in 2020. However, India refused to join the RCEP agreement on the ground that its ‘outstanding and domestic concerns’ remained unresolved. This article examines key factors that shaped India’s decision not to participate in the RCEP. To examine these key factors, two-level game literatures are used to focus on domestic factors and interest groups explaining the role of actors that shaped India’s trade policy preferences regarding the RCEP. Specific cases from the steel and agricultural sector are used to examine powerful sector-specific interest groups in this article. Findings show that powerful and well-organized interest groups within the steel sector successfully pressurized the government to withdraw from the RCEP. In the agricultural sector, interest groups are fragmented, but because of their large number as an electoral group, farmers and workers provided power to influence the government to opt out from the RCEP. RCEP negotiations, free trade agreements, India, WTO, sector-specific groups, domestic lobby, interest groups, and industry associations