There appear to be larger disruption coming in the form of RCEP agreement. Based on new reports initially our leadership appeared to be part of it to just for engagement sake, but now news headlines are turning in such way as to prepare India for RCEP. For example a news article here:
Title says “India has a fix for its Made-in-China problem” and describes providing less consessions to China compared to other countries itself as an achievement. There are more such articles in recent days which appear to be start of a PR campaign for RCEP welcome. Probably details are too less on what items will be immediately impacted vs what will be in medium/long term. It would be good to get inputs from seniors on how we could start preparing for this or ignore this for now and focus on current visible fundamentals. Does anybody know what items tentatively be in list of items that india will offer concession on? Some additional points are:
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China obviously is an expert in pushing cheap goods and with 28% items out of tax bracket on immediate basis, wont related industries have huge impact, considering everybody is struggling to come out of slowdown as of now? Are there any obvious losers here?
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With Indian corporates so far not being able to take advantage of FTAs to large extent and considering we are in midst of slowdown, will corporate earning recovery take much more longer to happen?
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Even if there is an economic recovery temporarily due to all government measures, wont the imports surge and result in temporary jobless growth? Just image 50 billion trade deficit that is already with China. Now if equivalent goods are produced in india, this would have resulted in millions of jobs which would have had ripple effect on economy and would have taken us in much higher growth path. This did not happen, even without FTA, and now with FTA arent we in for greater danger? Probably difficult to understand what would happen on medium/long term. But how do we approach this kind of problem when it comes to investing for medium long term?
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If india walks out of RCEP probably status quo continues (or not?)
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Heard this will be beneficial for Pharma. Which are companies expected to have benefit from this?
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How about textile sector?
