India firms up strategy for regional trade deal

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India has firmed up a two-pronged strategy for talks under the Regional Comprehensive Economic Partnership (RCEP). The next round of talks is scheduled on August 24-26 in Nay Pyi Taw, Myanmar.

After a slow period since it started in 2012, member countries are meeting frequently in order to close the deal by December. After the talks in Myanmar, members will be sitting for yet another round in Busan, South .

The RCEP is seen as an answer to the US-led Trans-Pacific Partnership (TPP) agreement. It is being negotiated among the 10-member ASEAN economies—Singapore, Malaysia, Thailand, Vietnam, Indonesia, the Philippines, Myanmar, Laos, Cambodia and Brunei—and six of its free trade partners—China, Australia, Japan, South Korea, New Zealand and India.

India has done its homework as it sits down to cull out a deal in the RCEP, which is being spearheaded by China. So far there have been eight rounds of talks.

“Our strategy is clear. We will offer a certain set of tariff lines for ASEAN, South Korea and Japan, with whom we have free trade agreements (FTAs) and our other non-FTA partners. We cannot offer the same to everyone. With the countries with which we have FTAs we cannot go above a certain level that has already been fixed,” a top official in the ministry of commerce and industry told Business Standard.

According to the official, India had already informally put forward the proposal during the inter-ministerial session that took place in Kuala Lumpur,Malaysia, earlier this month. During the meeting it was decided that India would offer 80-85 per cent of tariff lines for duty cuts to South Korea and Japan, 70-75 per cent tariff lines to ASEAN, and about 40-50 per cent to China, Australia and New Zealand.

Indian industry, especially the automobiles, steel, textiles, dairy and rubber sectors, are concerned that having a trade deal which includes China could hurt their interests.

“We are aware that some of the sectors have taken a beating. Why only China, we have taken a beating on coffee, cardamom and other agricultural products from Vietnam. That is why we are not offering everything to everyone. It has to be approached differently and we are aware of industry’s concerns,” the official said.