Prime Minister Narendra Modi is likely to participate in the Regional Comprehensive Economic Partnership (RCEP) Summit in Manila later in November where the country will face more pressure to improve its commitments for eliminating tariffs in goods and agree to an early conclusion of the mega trade deal.
“While officials at the recent negotiating round of RCEP in South Korea failed to agree on a joint statement that the heads-of-state from the RCEP countries would adopt in Manila, efforts would be made by members, including the ASEAN, to finalise crucial numbers and dates at the Summit meeting,” a government official told BusinessLine .Mega trade deal
The RCEP is a mega trade and investment pact being negotiated by the 10-member ASEAN, India, China, South Korea, Japan, Australia and New Zealand, which could result in the largest free-trade bloc in the world accounting for almost half of the world’s population, about 30 per cent of global GDP and over a quarter of world exports.
India’s recent round of improved market access offers in goods faced criticism at the negotiating round in South Korea in October as most members, including the ASEAN, said that the improvements were cosmetic and the country needed to commit to open up much more.
The ASEAN is keen that countries should agree to remove duties on at least 90 per cent of traded items while some other members like Australia want the number to be much higher. India, on the other hand, has made much lower commitments, especially for China, which is a key competitor of the country in its domestic market.
“We are worried about the kind of pressure that we would be under in the run-up to the RCEP Summit which is scheduled in the middle of this month. The final decision now depends on the resistance we face from our domestic industry against dropping tariffs and the political call that the leadership takes,” the official said.
The RCEP Summit will be held on the sidelines of the ASEAN Summit in Manila on November 12-14. A meeting of Trade Ministers from the RCEP countries and a Trade Negotiations Committee meeting will precede the Summit where members would try to finalise the joint communication for the heads-of-states.
New Delhi is disappointed with the way the RCEP negotiations have shaped so far as it has not received any significant offer from other members in the services sector while demands are piling high for dismantling tariffs in goods.
The Indian industry is apprehensive about facing competition without the protection of tariffs from most RCEP partners, especially China, with which the country has an ever-widening trade deficit.