As talks for the Regional Comprehensive Economic Partnership (RCEP) enter their final stages, opposition to the 16-country Asian trade pact is growing among the Hindu nationalist groups that the government counts on for support.
Nationwide protests this month have been orchestrated by Swadeshi Jagran Manch (SJM), translated loosely as indigenous awakening platform, an affiliate of Rashtriya Swayamsevak Sangh (RSS), the parent body of the ruling Bharatiya Janata Party (BJP).
Rallies involving 224 farmers' groups and 165 trade and industry organisations took place in dozens of districts across the country from Oct 10 to 20. The aim was to step up pressure on Prime Minister Narendra Modi before he travels to Bangkok for the Asean and East Asia summits from Nov 2-4. Negotiators are hoping the region's leaders will have a trade deal to sign when they arrive.
"We are in support of farmers whom the RCEP will damage. We are in support of manufacturers that the RCEP will damage. And we are in support of employment for youth, which the RCEP will damage," Deepak Sharma, national spokesman for the SJM, told Asia Focus.
Mr Sharma estimated that the RCEP could push 50 million farmers, many of them women, out of the dairy industry. As well, he said, it could create more difficulties for micro, small and medium enterprises that were already finding it difficult to cope with Chinese dumping.
"The trade deficit with Asean stands at US$21.9 billion, having risen by over 13% since 2014," he said. "With China, India's deficit stands at $54 billion (Beijing claims it to be $58 billion). Imagine what will happen when there are no trade barriers. The economy will lose," said Mr Sharma, vowing that the SJM would continue to oppose the deal tooth and nail.
The SJM, which came into being in 1991, has had a love-hate relationship with BJP-led governments in New Delhi. When former prime minister Atal Behari Vajpayee was in power, the SJM bitterly opposed his economic policies.
The SJM has been bolstered by support from the RSS, whose chief Mohan Bhagwat cautioned the BJP against rushing into the deal earlier this month.
Officials in the Modi government have defended the deal, noting that among other provisions, India can take advantage of an automatic trigger safeguard mechanism (ATSM) to prevent its interests from being harmed.
Mr Sharma does not believe the mechanism will be enough to stem the losses. "The losses will be on a much larger scale," he said. "Besides, the RCEP members have not even agreed to India implementing the ATSM against imports from the RCEP nations."
Gopal Krishna Agrawal, the BJP spokesman on economic affairs, expressed confidence that the government would be able to allay concerns of the SJM and other farmers' and industry bodies. He refused to commit on the deal, but there are growing indications that the Indian government does not want to be left out of the global platform.
The trade deficit with China is a sensitive issue, but Mr Modi and Chinese President Xi Jinping struck an upbeat tone during the latter's recent visit to India. A spokesman said Mr Modi told Mr Xi that "it is important ... that a balance is maintained in trade in goods, trade in services and investments" under the RCEP. The Chinese leader, meanwhile, said his country was ready to take "sincere action" on trade and "to discuss in a very concrete way how to reduce the trade deficit".
Describing India as a global economic player that believes in an open market, Mr Agrawal told Asia Focus that a final decision on the deal would rest with Mr Modi. The latter has held numerous meetings with party leaders and ministers to refine India's position.
Besides the ATSM, the spokesman said India would also have the option of imposing anti-dumping duties, non-tariff barriers or staggering implementation if trading partners are found to be exporting goods to India in excess of what has been agreed.
Mr Agrawal said the government would do a cost-benefit analysis before deciding on the deal, adding that New Delhi would not take a decision under global pressure. "Did we bother about global pressure on Article 370? A decision on the RCEP will also be taken on the basis of political, economic and strategic interests," he said.
Article 370 of the Indian Constitution, granting special autonomous status to Jammu and Kashmir, was revoked in August by the Modi government. The region is now under tight central government control and the curbs on human rights have drawn widespread condemnation from many countries.
Biswajit Dhar, a trade expert at Jawaharlal Nehru University, took issue with Mr Agrawal's statement. He said a decision on the deal should be taken solely by looking at the economic balance sheet. Mr Dhar agreed with Mr Sharma that the ATSM would not stop the influx of imports. As it stands, he said, there is a mismatch between RCEP members' push for liberalisation and Indian needs.
"Our needs and RCEP expectations are at loggerheads. Other RCEP members are aggressive liberalisers," he said, predicting losses for Indian farming and manufacturing if the pact is adopted.
Negotiators from the RCEP countries have concluded 21 of the 25 chapters of the final agreement and met in Bangkok earlier this month to thrash out the remaining four. They hope to have a final text ready for signing when the heads of government meet in early November in the Thai capital.
The RCEP includes the 10 Asean states and six key trade partners: Australia, China, India, Japan, South Korea and New Zealand. First conceived in 2012, the pact was originally scheduled to be signed in 2015. But talks have dragged on, due in large part to disagreements between China and India.
The RCEP is of strategic importance for India both in the context of its Look East policy and the comprehensive nature of the engagement it represents.
India is expected to reduce or abolish duties on about 80% of goods imported from China under the agreement. It may cut customs duties on 86% of imports from Australia and New Zealand and 90% for products imported from Asean nations, South Korea and Japan. Full elimination of duties can take place over various time frames ranging from five to 25 years depending on the product.
Besides expressing concern about dumping of Chinese goods, India has been pushing for more liberalisation of trade in services, which would help its strategically important IT industry, under the deal. It has also been demanding data localisation, under which data related to residents must be collected, processed, and/or stored inside the country. This too would create more opportunities for the Indian IT sector.
