RCEP negotiations: India faces flak for tariff cuts

India has got “singled out’’ for offering the lowest market openings in goods at the recent ministerial meeting of the 16 countries negotiating a regional comprehensive economic partnership (RCEP) pact. It is under pressure to improve its offers substantially.

New Delhi also conceded to the demand of RCEP members, including the 10-member Asean countries, China, South Korea, Japan, Australia and New Zealand, to agree to a separate group on e-commerce that will hold its meeting early next month, a Government official told BusinessLine .

However, it got itself a breather as the ‘e-commerce’ group is one on cooperation and is not yet a negotiating one. “India need not take any commitment immediately as the committee will have to meet to decide its agenda. It will first start with exchange of information. We have some breathing space,” a government official said.

Members are trying to wrap up the negotiations for RCEP — which will result in the largest regional trading bloc in the world — by the end of this year. RCEP countries account for 45 per cent of the world’s population with a combined gross domestic product of $21.4 trillion.

In the negotiations on goods, India faced flak from all for offering low market openings. “Even China and South Korea, which initially supported India’s low ambitions, found its offers too low,” the official added.

Commerce and industry Minister Nirmala Sitharaman, who represented India at the meeting in Kuala Lumpur, did not give any concrete assurance of better offers on tariff cuts, but pressure will mount in the next negotiating round beginning August 3 in Nay Pyi Taw.

New Delhi wants to commit to tariff cuts on less than half the goods it trades. Members such as Australia, New Zealand and Japan want India to more than double its offer, while China and South Korea want a middle ground.

India is reluctant as it would mean giving greater access to goods from China — something that the Indian industry is totally against.

“Although there would most likely be a mechanism where members would offer different levels of concessions to different countries, the lowest levels cannot be too different from the highest ones,” the official said.

In the area of services, while most members have agreed to India’s condition of a positive list (only those sectors included that are mentioned in the list), many are insisting that whatever is offered on a most favoured nation (MFN) basis to all trade partners at the moment, should be woven into the commitments.

“India does not want that as the openings in services offered on an MFN basis can be withdrawn when required, but once commitments are taken, it is difficult to do so,” the official added.

Rules on investments and government procurement would also be part of the pact.

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