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India wants to offer lower market access concessions to countries such as China, Australia and New Zealand, with which it has no bilateral free trade agreements (FTA), as part of the Regional Comprehensive Economic Partnership (RCEP) being negotiated.
The next round of the negotiations for RCEP — a free trade pact between India, the Asean bloc, Japan, South Korea, China, Australia and New Zealand — will be in New Delhi on December 1-5.
New Delhi is also trying to ensure that agreements on goods and services do not get hived off into separate packages but are concluded together as a comprehensive pact.
“We do not want to offer the same concessions that we give to the ten Asean countries, Japan and South Korea that are our FTA partners, to other members, especially China. We will discuss this at the New Delhi meeting,” a Commerce Ministry official told BusinessLine .
Asean includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
The problem that India faces is that as per negotiating rules, it has to give a basic minimum level of common offers to all RCEP members. “Since Indian industry is extremely cautious of China, we are finding it difficult to come up with substantial offers. It is something we have to deal with,” the official said.
The proposed RCEP will create the largest regional trading bloc in the world, involving 45 per cent of the world population with a combined gross domestic product of $21.4 trillion.
“Regional integration is extremely important and India must work towards it. RCEP is a great opportunity for us. It is India’s time to take advantage of this. If we don’t do so, we will lose being part of the regional chain,” said Commerce Secretary Rajeev Kher at a seminar organised by CII and Japanese trade body JETRO on Tuesday.
Indian industry should not shy away from opening up as it could lead to development of local industry’s supply chain, said Toshiyuki Sakamoto, Deputy Director-General, Ministry of Economy, Trade and Industry.
“Thailand and Indonesia’s experiences show that opening up led them to become important parts of the supply chain of the automobile industry,” he said.
RCEP is crucial for Indian industry at a time when developed economies are negotiating mega free trade deals such as the Trade and Investment Partnership and Transatlantic Trade and Partnership, Kher said.
India has implemented a number of FTAs with countries and groupings such as Japan, South Korea, Sri Lanka and Asean, but is yet to be part of a significant regional trade bloc.
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