It's India or RCEP who's causing problem?

                         .RCEP and India.

Hey, welcome back all the viewers to this blog where we are going to discuss complete information about RCEP and then what happened to India, what will be the technological effect of it on India. 

Will it affect India, if yes, then how India will need to come back, and others question will be covered too?

So, be with us till last to answer your questions, this blog will definitely make you understand about ongoing real deal in the world. So, except for all the fun you're doing let's directly jump to the blog.

RCEP:-

RCEP is an abbreviation of Regional Comprehensive Economic Partnership, you can understand it like this, take an example of India, okay? and that's a truth, that there is a lot of diversity in this country, and if someone wants to purchase something indigenous to Gujarat, Rajasthan, or some other state and I live in Delhi, then there is no need to manually go to other states to purchase those things. 

As some business traders will be selling those things from Gujarat to Delhi or other states, and what that trader needs to pay is just some state tax and legal documents, nothing else. 

Like no VIP, passport, visa, etc. Cause they are all different states but inside the same country boundary, that same will happen with all those who have signed RCEP. 

Yes, you heard me correct, all signatories of RCEP like Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Phillippines, Singapore, South Korea, Thailand, Vietnam. 

Earlier India was also there but then India refused to sign there's some specific reason for that and we'll come on that.

But for now, let's have a look at this figure:

Pic credit: grain

Well, In November 2019, India pulled itself off, but later the South-Asian Leaders decided that whenever India wants, the nation can rejoin. 

Well, Countries which are included in RCEP definitely are a big deal cause countries involved summed up to 30% of the world's GDP. 

Yes! up to 30% global gross domestic product, then you guys must be thinking why India went off from this agreement. 

Understanding The Agreement:-

The Agreement is all those countries who had signed the contract, can trade among themselves country to country without any tax-exchange between them. 

Yes, that is correct any New Zealand trader or business investor can trade or sell or invest in any other RCEP signatories without much interference or without paying taxes to other countries. 

That is the same case for all countries involved whether it's New Zealand or China or Malaysia or Cambodia etc. 

Whoever wants to sell, whatever want to sell, they can in a manner like the country is their neighbor's house just a few restrictions no entry fees, and boom the trading company will make a profit as well as the country from which traders are in higher number. 

Understand The Problem:-

The problem is the company which is selling their stuff in other countries makes a profit, but what does the targeted country make? Well, the answer is nothing.

Yes! India and China's relation is not so simple, they are in too much conflict with each other from the last year, which makes them not-so-simple to interpret countries.

Pic credit: Business Insider India 

After India banned China's goods and products, then China went through a huge loss after this agreement there will be no-one to stop China from selling their products to India, this time without tax-paying so you can assume that the product will be doubled or even tripled for some stuff. 

So, you can just imagine how much loss the Indian economy will be suffering, too much, the GDP is already in negative due to crisis and political instability. 

Pic credit: The Economic Time

Not Just This:-

But, other RCEP signatories like Australia and New Zealand will be targeting developing countries of this chain-like India to sell their product at a very cheap rate and high volume. Like in Australia, a country with just a population of 2.6 crores, the amount of dairy product produced in this country is just unbelievably huge, they have enough milk, yogurt, cottage cheese, etc. that they can import in India and thus it will affect Indian economy market cause when foreign exported milk and it's the product will be cheaper then the target consumers will be affected and they will change their consumption source. 

 

Pic credit: Bloomberg 

There are certain factors like this which will influence India and the Indian market although it will affect India in long run positively. 

Let's take another example, In India, there is currently a huge consumption of Gold and other precious metals like Diamonds and Pearls, So, As you know China is one of the big deal, in this case, assume that if the Chinese imported gold in a heavy amount in India, and the rate went as down as 10,000 So assume how adversely it will affect Indian Gold Market.

Pic credit: bullion star

 

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