The Economic Times - 06 September 2019
India readies list of products for sops as crucial RCEP meet nears
By Kirtika Suneja, Dipanjan Roy Chaudhury
Policymakers will soon take a call on India’s position in the Regional Comprehensive Economic Partnership (RCEP) trade agreement, negotiations for which have entered the final stage.
New Delhi has begun drawing up a list of products on which it can offer duty concessions to the 15 other Asia Pacific member countries, including China. Top officials have held several meetings this week in preparation of a crucial meeting of trade ministers of the grouping in Bangkok on September 7-8, said an official.
RCEP is a proposed regional economic integration agreement among the 10 Asean countries and their six free-trade agreement (FTA) partners—Australia, New Zealand, Japan, China, South Korea and India. Its member countries account for 47.4% of the global population, 32.2% of the global economy, and 29.1% of global trade. RCEP negotiations began in November 2012.
In India, there is apprehension among government departments and industry that a trade deal on the current terms will lead to China dumping goods in India. The ministries of steel, agriculture and chemicals, and executives of industries such as dairy, steel, copper, textiles, aluminium, engineering, pharmaceuticals, leather and food, have expressed their reservations on it. “High-level meetings have taken place and more have been planned till Friday in the runup to the final political call,” the official cited earlier said.
Last month, amid pressure to conclude the deal this year, New Delhi had said that an RCEP agreement will be acceptable only if it addresses the existing level of trade imbalance, especially with China. India’s trade deficit with the 16-member trade grouping is $105.2 billion, of which $53.6 billion is with China. India had then insisted that RCEP negotiations cannot conclude until its demands on duty cuts and cross-border movement of professionals are met, especially removal of restrictions by China for its information technology companies.
Sidharto Reza Suryodipuro, Indonesia’s Ambassador to India, said, “Indonesia’s views has always been consistent, that India is a crucial part of our regional architecture, what we call the Indo-Pacific.”
Harinder Sidhu, High Commissioner of Australia to India, said, “Australia sees India as an essential participant in the RCEP. RCEP will help India increase its export competitiveness, integrate into regional production chains and attract investment.All of this contributes to new jobs and economic growth.”
Experts say India can benefit from the agreement if it has the requisite safeguards in place to secure its interests.
“There should be certain safeguards that India should ensure before concluding the deal. These can be longer staging period, keeping products in which we can’t get competitive out of preferential access, and ensuring that India becomes part of the larger value chain,” said a Delhi-based expert on trade.
Bipul Chatterjee, executive director, CUTS International, said, “RCEP is an Asean-led initiative. While the strategic value of RCEP can’t be over-stated, it should be balanced with its economic implications.” Chatterjee added that RCEP should be an important pillar of India’s Indo-Pacific doctrine.