India is facing resistance from other members at the ongoing Regional Comprehensive Economic Partnership (RCEP) negotiations as it tries to protect its industry and services sectors from unrestricted competition.
New Delhi’s suggestion of offering differentiated tariff cuts to various members and carrying out services negotiations based on a positive list, where commitments are directly spelt out, is facing opposition from many countries, a Commerce Ministry official told BusinessLine .
The 16-member grouping, which includes the ten-member Asean, as well as Japan, China, South Korea, Australia and New Zealand, besides India, is struggling to finalise the modalities of the agreement (the rules based on which liberalisation would happen) in the ongoing sixth round of negotiations here.
Members are desperate to reach a breakthrough in the ongoing round as the target for concluding the negotiations — which could result in the largest trading bloc in the world — is the end of next year.
“In goods, if members want meaningful offers at the initial stage, they would have to accept differentiated tariff cuts. China, which poses the largest threat to Indian manufacturers, can’t be given the same offers as the Asean. Similarly, Australia and New Zealand, with which India has no bilateral Free Trade Agreements, cannot hope to get the same offers as our FTA partners,” the official said.
RCEP members that have FTAs with India are the Asean, South Korea and Japan.
Services is also a tricky area for India as members such as Japan and South Korea want to adopt a negative list approach, where countries open up the entire sector, and protect just the areas mentioned in the list.
India, however, is not comfortable with negative lists, given the risk that it may unknowingly fail to protect certain sectors and realise it only when it is too late and the agreement is implemented.
“A positive list approach, which India prefers, gives the country the flexibility to liberalise the services sectors, keeping development priorities in mind, as this would list out only the areas that it wants to open up,” said Abhijit Das from the Centre for WTO Studies.
India also wants to ensure that an agreement in services happens simultaneously with goods to retain its bargaining power.