INTRODUCTION

Nearly two decades after announcing its Look East Policy (LEP), India is poised to play a much greater role in the Asia-Pacific than it had probably envisaged at that point in time. After several years of lukewarm ties with most countries of the region since the beginning of the Cold War, India's strategic economic links with the region have increased sharply. This is reflected in its presence in regional institutional mechanisms like the East Asia Summit (EAS), ASEAN Regional Forum (ARF), and several other bilateral trade and economic cooperation agreements in the region. Notwithstanding these, it is still not as deeply entrenched in the economic domain of the Asia-Pacific as it could possibly be. A major factor behind the relatively low integration is India's hesitation to decisively abandon a defensive and inward-looking trade agenda. The hesitation has been a compelling determinant of its relatively lesser interface with a region that has long taken a more liberal approach to trade and investment than India and followed strongly outward-oriented policies.

The reputation of being a hesitant economic liberalizer and difficult trade negotiator is firmly affixed on India as it negotiates the Regional Comprehensive Economic Partnership (RCEP) — its largest trade and economic deal with the Asia-Pacific region so far. The gradual maturing of negotiations at the RCEP has been accompanied by significant domestic changes in India, the most notable being a change in government with the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) having a pronounced right-of-centre political and economic ideology replacing the more left-of-centre Congress-led United Progressive Alliance (UPA). There are wide expectations from the new government in pursuing a more aggressive course of market-based economic reforms than its predecessor. Such expectations extend to India adopting a forward-looking and constructive approach in its external trade negotiations, including the RCEP.

This chapter examines the context of India's participation at the RCEP, including its active Free Trade Agreement (FTA) policy and the questions about the benefits of these FTAs. It illustrates the economic and strategic significance of the RCEP for India, particularly the gains accruable from its greater presence in global value chains and a larger strategic role in the region.