Withdrawal of India from the Regional Comprehensive Economic Partnership AgreementThe RCEPFour years later, its neighbors Sri Lanka and Bangladesh are now actively considering joining this large trade alliance to open up a broader market for their economies.RCEP is the largest trade agreement in Asia, which includes China, Japan, South Korea, ASEAN countries, Australia and New Zealand, together accounting for 30% of the global GDP.

Sri Lanka has officially submitted its application to join RCEP. Its government confirmed the decision in August this year and said it has high expectations for the potential of this trade region comprising several major economies. In order to further promote its application, Sri Lanka is actively engaged in bilateral talks with Malaysia, Indonesia, Japan and Thailand to seek their support.

Meanwhile, Bangladesh is also actively considering joining RCEP. The country’s Foreign Minister, Abdul Morman, said that the Ministry of Commerce has suggested that the government adopt the scheme and is expected to make the final decision after the general election in January 2024.

While both Sri Lanka and Bangladesh have a free trade agreement with India and are signatories of the South Asian Free Trade Agreement, which came into force in 2006, joining RCEP will take the two countries out of the subcontinent’s trade circle and trade more widely with other Asian countries.

The move naturally raised concerns in India. Senior officials in the Indian government said that the joining of neighboring countries to RCEP is a “anxious development.” They feared that this would make the market around India more inclined toward China, while China is dominant in RCEP. This could lead to India losing competitiveness in these markets.

But analysts believe that the reasons Sri Lanka and Bangladesh chose to join RCEP are far more than this.Castury Cherallaja Wilson, president of the Sri Lanka Kahraman Group, believes that Sri Lanka has realized the importance of regional markets during the economic crisis.She said that joining RCEP and other trade agreements can help Sri Lanka expand its markets and enhance its competitiveness in the face of big international companies.

Overall, the choice of the two countries reflects the pursuit of larger markets in the era of globalization, as well as the importance of regional trade agreements.In this context, India may also need to re-evaluate its position in RCEP to ensure its position in the Asian market.