Faced with a huge trade deficit, India is expected to offer a different set of duty concessions for China at the Regional Comprehensive Economic Partnership (RCEP) ministerial meeting in the Philippines on November 4. RCEP is a mega trade agreement under negotiations among 16 entities, including India, Asean, Japan, China and Australia.
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The pact aims at significant liberalisation of trade in goods, services and investments. Top sources in the commerce ministry said the member countries also realise that China is a concern for India. India’s trade deficit in goods with China swelled to USD 52.68 billion in 2015-16, from USD 48.48 billion in the previous fiscal.
As the domestic industry has time and again raised concerns about increasing imports from the neighbouring countries, the government does not want to take any chance in this pact that may impact domestic companies. During the ministerial meeting, which will be attended by Commerce and Industry Minister Nirmala Sitharaman, the RCEP members will deliberate on the single-tier system of duty relaxation.
Sources said India can not give the same treatment to China in terms of duty concessions on goods which it proposes to extend to Asean or other countries like Japan and Korea in the pact. Although the commerce ministry has not yet finalised its stand for this meeting, they said “it will be China with whom we want a different staging period to eliminate or reduce import duties; different set of negative list and different set of offers”.
As the domestic industry has apprehensions over a deluge in imports from countries like China after the duty cut under the agreement, India may take certain deviations.
“When it comes to China, even Japan and Korea are doubly cautious,” they added. The 16-member RCEP bloc comprises 10 Asean members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners – India, China, Japan, South Korea, Australia and New Zealand.
In the meeting, India would also emphasised on taking the negotiations of services forward, along with goods.
“In the negotiations, it is very clear that all want India to be more flexible on goods, but not even for a minute, they want to consider the same flexibility in services from their end,” they added. On services, RCEP members are not moving at all and “we are now going to link up saying equally you progress in services, then we explain about our offers in goods,” the sources said.