India’s Commerce Minister Piyush Goyal has firmly rejected the idea of joining the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade deal, stating it does not align with the nation’s interests, particularly regarding trade agreements with China. In an interview with CNBC, Piyush Goyal explained that the RCEP, which includes 15 Asia-Pacific countries and represents 30% of global GDP, fails to reflect the foundational principles of the Association of Southeast Asian Nations (ASEAN) and poses risks to India’s farmers and small industries.
The RCEP was signed in 2020 and came into force in January 2022. While India was initially part of the negotiations that began in 2013, it opted out in 2019, citing unresolved “core interest” issues. Piyush Goyal emphasized that RCEP would essentially serve as a free trade agreement with China, a country he described as having “very opaque” trade practices. He highlighted the challenges Indian industries face competing with China’s non-transparent economy, which has been accused of flooding global markets with low-quality goods.
Additionally, Piyush Goyal pointed out that China has exploited World Trade Organization (WTO) policies to its advantage, leading to a surge in cheap exports that do not meet international quality standards. He mentioned products ranging from solar panels to steel as examples of China’s aggressive export strategy.
On a more positive note, Piyush Goyal outlined India’s ambitions in the semiconductor industry, proposing that India could serve as a “Taiwan Plus One” destination for semiconductor manufacturing. This strategy encourages companies to diversify their supply chains beyond Taiwan, reducing dependence on a single market. Piyush Goyal expressed optimism about India’s semiconductor ecosystem, which aims to meet a projected demand of $100 billion by 2030.
Earlier this year, Prime Minister Narendra Modi inaugurated three semiconductor plants, with a total of four currently in development. A notable project includes a joint venture between Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corp., set to begin operations in Dholera, Gujarat, by late 2025 or early 2026.
Piyush Goyal asserted that India’s democratic governance, youthful population, and rule of law make it an attractive alternative for semiconductor investments. He highlighted the global acknowledgment of risks associated with excessive reliance on any single region for semiconductor production, emphasizing India’s strategy of forming partnerships with major semiconductor nations, including the U.S. India’s efforts in the semiconductor sector are backed by a $10 billion incentive program designed to attract foreign investment and enhance local capabilities.
