Commerce and industry minister Piyush Goyal will not participate in the two-day Regional Comprehensive Economic Partnership (RCEP) ministerial meet in Beijing starting August 3.
Commerce and industry minister Piyush Goyal will not participate in the two-day Regional Comprehensive Economic Partnership (RCEP) ministerial meet in Beijing starting August 3. The minister cancelled his trip as he has to attend the ongoing Parliament session, which has been extended to August 7, said an official source.
However, industry sources said the cancellation of visit reflected India’s growing anxiety over domestic resistance to the 16-nation mega trade deal.
From steel to pharmaceuticals, industries have been criticising the country’s various existing trade agreements with Asean, Japan and South Korea on grounds that India’s trade deficit with these countries have only widened after these pacts came into force, and there is little for domestic industry to benefit from.
If, on top of this, a free trade agreement with China is effected through the RCEP (of which Beijing is a key member), cheap products will flood the market, they have pointed out.
India had a record $63-billion goods trade deficit with China in 2017-18, which reduced in 2018-19 but still remained uncomfortably high.
Last year, a government panel under then commerce and industry minister, Suresh Prabhu, had decided to continue to remain engaged in RCEP negotiations but not to sweeten offer for goods trade further.
At the RCEP negotiations in Singapore in August last year, members had agreed to provide India a time-frame of over 20 years to eliminate tariff on key items for China, Australia and New Zealand with which it doesn’t have a free trade agreement. The members also agreed to include the clause of free movement of skilled professionals in the pact on services under RCEP, acceding to another demand by India.
The members also accepted India’s demand that it could negotiate with its non-FTA partners, including China, bilaterally, and separately, on concession they are willing to grant each other under the RCEP framework. The RCEP negotiations, which were supposed to achieve substantial progress in 2018, continued in 2019 as well.
For its part, India has proposed to eliminate tariffs on 80% of products with a margin of 6%, depending on level of development of the other country as part of the RCEP negotiations. This means India may have to scrap duties on 74% of goods from China in the long run. However, many RCEP members want India to commit to abolish duties on 92% of its goods.