NEW DELHI: The government has taken a policy decision that it will not walk out of the RCEP negotiations, which are supposed to be finalised later this week. Paradoxically, this decision could place it in a tougher bargaining position as other RCEP nations — China, ASEAN nations and Australia — are sticking to their guns on getting India to agree to deep tariff cuts in a host of areas including sensitive sectors such as textiles.
“We had suggested an early trigger mechanism, which could allow us to raise tariff substantially in case of a surge in imports of a particular line. However, neither the domestic industry nor our trading partners are showing much interest. The domestic industry said it is not a suitable mechanism, while partner countries say it is too late to introduce the clause,” said commerce ministry officials. The commerce minister is expected to lead a team to Bangkok later this week to put final touches to the Regional Comprehensive Economic Partnership (RCEP) pact being negotiated among 10 ASEAN members and their six trading partners including China, Japan, India and Australia.
Several Indian industries including textile and dairy have warned against opening up their sectors. India’s trade deficit with the RCEP nations taken together is $105 billion, with the lion’s share being accounted for by China. India has free trade pacts with ASEAN nations, Japan and South Korea and its experienced industry bodies have pointed out that an increase in the volume of exports by these countries to be the detriment of India.
The most crucial negotiations on market opening up with China remains stuck mainly on account of India’s fears that its trade deficit with China will go up and Commerce Minister Piyush Goyal and his team are expected to try and sew this up.
However, attempts to stall the opening up of Indian textile and dairy markets, which Indian negotiators thought would be acceptable to other RCEP members seems unlikely as informal sounding with negotiators from these countries show that they are not in the mood to concede to all of India’s demands.