NEW DELHI: India said on Thursday it would go ahead with final negotiations to join the Regional Comprehensive Economic Partnership (RCEP), despite objections from India Inc and RSS arm Swadeshi Jagran Manch, which flagged a surge in Chinese imports.
The announcement comes a day ahead of PM Narendra Modi and Chinese President Xi Jinping’s informal summit at Mahabalipuram where the mega pact is expected to figure as part of the talks. To assuage the jittery Indian industry, the commerce ministry issued a statement on Thursday saying the focus of negotiations would be on putting in place safeguards for domestic companies. These will include an auto-trigger mechanism against any surge in imports.
Commerce Minister Piyush Goyal is expected to travel to Bangkok later this week for final negotiations. A Leaders’ summit is scheduled on November 4, in which Modi is expected to attend. Officials said these meetings come at a crucial stage as “RCEP is scheduled to be announced as concluded” in November.
“The thinking is that it is better to be inside than outside as there is more to lose if we are out of the pact,” said Ambassador Pinak R Chakravarty, ex-secretary (Economic Relations), MEA.
RCEP is a free trade agreement being negotiated among 10 ASEAN members and their six trading partners including China, Japan, India and Australia. Once in place, it will become the largest trading bloc globally, accounting for 40 per cent of world GDP.
India lost out by staying out of ASEAN when it was formed and missing the RCEP bus could be potentially a bigger loss, officials pointed out. “We are saying that we will not back out of joining the pact but we will try and get safeguards in for our industry,” top commerce ministry officials said, adding Goyal will be concluding negotiations at the Bangkok Ministerial Summit on “crucial chapters of Investment, Electronic Commerce, Rules of Origin and Trade Remedies (which) are yet to be settled."
Indian officials want an auto-trigger mechanism, which will allow India to charge higher import duties if it finds there is an unexplained surge in import of any product. To safeguard Indian industry, negotiators also plans to try and backload tariff reductions, which are expected to reduce duties on 74 per cent of India’s imports to nil over a 20-year period.
However, industry associations and organisations including textile industry and cooperative sector giant Amul, remain dead against the pact. The Swadeshi Jagran Manch, loosely affiliated to the RSS has called for a nation-wide protest against the RCEP.
India wants an auto-trigger mechanism, which will allow India to charge higher import duties for any unexplained surge in imports. Negotiators also want to backload tariff reductions, which could lower duties on 74% of imports to nil over a 20-year period