Prime Minister Narendra Modi is expected to take the political call on India joining RCEP as part of the country’s growing economic footprints in the Indo-Pacific region. Some prospective RCEP member states including G-20 economies from South East Asia and East Asia are keen on India’s presence in RCEP amid apprehensions that its absence will enable China to dominate the trade bloc.
India is seen as a balancing power in the bloc.
Officials said that though negotiations are almost complete for all chapters, they are awaiting a political decision as India tries to balance its ties with Japan and China along with domestic interests.
Negotiations for resolving outstanding issues on RCEP are going on in Bangkok, secretary (east) at the ministry of external affairs (MEA) Vijay Thakur Singh said, adding the leaders will review the state of negotiations.
“India will wait for the outcome of the negotiations on RCEP. Some critical issues are outstanding.
We will only participate in a fair and transparent trading environment,” he said.
Indian trade officials will meet in Bangkok on November 1, ahead of the ASEAN summit.
Indian officials have concluded negotiations on most of the 25 chapters, and the rest would be concluded before November 4, when Modi joins the leaders of the 10-member Association of Southeast Asian Nations bloc and five other countries for the summit.
Negotiators are “narrowing the gaps” including putting in adequate protection against cheap Chinese imports which are feared to flood the Indian market, once RCEP is concluded. Differences over some areas, like rules of origin, e-commerce, auto-trigger mechanism and trade remedies, are being discussed by Indian officials ahead of the summit.
New Delhi is pushing to be able to use an auto-trigger mechanism that will allow it to check sudden import surges from China, more than once and also wants to change the base duties besides putting in place strict origin norms to ensure that only imported goods get duty concessions.
“India is playing hardball to secure its interests. We have made conservative offers,” said one official.
India is said to have made conservative offers for the ten-day work plan of 14 issues that was compiled by the member countries in order to speed up the resolution of the pending issues, it wants to change the base year to eliminate tariffs on around 1,000 products from China to 2019 from 2014.
“Strong or weak rules of origin are immaterial because once the deal is done, there would be no circumvention as everything would come from China legally and directly,” said another official.
Separately, New Delhi is also opposed to taking commitments on investment policy decisions at municipal and panchayat levels.