RCEP talks: India under pressure to offer deeper tariff cuts05/05/2017 56
India is not yet ready with its market opening offers for the members of the Regional Comprehensive Economic Partnership (RCEP) — especially China — as senior officials get ready to hold the next negotiating round in the Philippines.
The round of talks beginning on Thursday is crucial as the 16 participants, including the 10-member ASEAN, would try to evolve a consensus on the progress that trade ministers from the region should make when they meet in the end of the month.
“RCEP countries are tired with the long-dragging negotiations and want closure soon. Commerce & Industry Minister Nirmala Sitharaman will be required to reveal what India’s stance is towards the pact is given the fact that most members are not ready to accept low ambitions. Soon the question will boil down to whether India is in or out. We have to be ready for that,” a government official told BusinessLine.
The RCEP comprises ASEAN and its FTA partners including India, China, Japan, South Korea, Australia and New Zealand. Once concluded, it could be the largest free trade bloc in the world accounting for 45 per cent of the world population and over $21 trillion of gross domestic product
Going forward has become extremely difficult for India as most RCEP members want zero duties on almost all products and only small exceptions are allowed for some countries and products through deviations.
While India had initially offered to gradually eliminate tariffs on 42.5 per cent of items from China, it has been rejected not just by China but also by the ASEAN (which was offered zero duty on 80 per cent items) as the general feeling is that the deviations cannot be so large.
“Giving too much market access to China will not only hit the Indian industry but will also be a politically sensitive decision especially because the RCEP pact could kick in during the time of the next general elections in 2019,” the official added.
India will be under immense pressure to show its cards in this week’s round of talks, but there is nothing that the officials can do about it.
“There is no word yet from the higher offices on the extent to which markets can be opened for tricky members like China, Australia and New Zealand with which the country doesn’t have free trade pacts,” a government official said. Although the new deadline to conclude the RCEP negotiations has been shifted to early 2018, most members including the ASEAN are serious about arriving at something concrete at the Philippines RCEP Ministerial meeting scheduled later this month .
“It was decided in the last round in Kobe, Japan, that concrete offers should be on the table during this round in the Philippines. Things are worse for India, as no country has come up with lucrative offers in services and none seem to be complaining about it,” the official added.
Source: Hindu Businessline