Commerce min may continue to back RCEP talks
Despite other ministries and stakeholders voicing concern on the Regional Comprehensive Economic Partnership (RCEP), the commerce ministry may continue to bat for it, citing the advanced stage of negotiations and the expected benefits for India's services exports, sources said.
On Friday, the commerce secretary will brief his counterparts in ministries including finance, steel, textile and defence at the Cabinet Secretariat on the current state of negotiations and the way forward, sources said.
The RCEP is a proposed pact between the 10 Asean economies and six others with which the grouping currently has free-trade agreements (FTAs) — New Zealand, Australia, China, India, Japan and South Korea. So far, 23 rounds of talks have concluded, apart from five minister-level meets.
Disagreement between ministries on the proposed mega regional free trade agreement has led to the government reportedly setting up a four-member group of ministers headed by Commerce Minister Suresh Prabhu to advise the Prime Minister on whether to continue with or withdraw from the 16-member RCEP negotiations.
No date has been set for the next meeting of ministers but the government hopes to clear the confusion on the RCEP before the end of August.
There has been significant pushback against the proposed deal from the domestic manufacturing and export sectors. They argue existing FTAs with Malaysia, Japan and South Korea are grossly unfavourable to India. "With all these nations also being part of the RCEP, which aims for further easing import barriers and market access restrictions, there have been concerns from a couple of industry bodies, which have asked the government to exempt specific commodities from the list of items currently being discussed." a senior commerce department official said.
This includes the Confederation of Indian Industry and Aluminium Association of India, among others. Overall, India's trade deficit rose in 2017-18 for seven countries in the RCEP grouping, according to a recent report.
Stuck negotiations
“We are willing to offer reduction on up to 86 per cent of all tariff lines, with a 6 per cent deviation for nations with which we don't have an FTA,” the official mentioned earlier said.
Under this scenario, India has offered to reduce its tariffs on all goods by 74-86 per cent.
However, other nations, led by New Zealand and Australia, want tariffs cut on up to 92 per cent of all goods. Supported by Asean, they have also stressed that the deviation proposed by India for various nations should be only 1-2 per cent.