India might take two-tier approach in goods trade under RCEP

Decision aimed to to appease the domestic industry that has put up stiff resistance in negotiating the China-led RCEP

India has decided to take a two-tiered approach for slashing of tariffs on trade in goods under the proposed Regional Comprehensive Economic Partnership (RCEP) offering greater tariff lines for this Free Trade Agreement (FTA) partners.

During an inter-ministerial session on RCEP that took place in Kuala Lumpur, it is learnt that India offered around 75-80 tariff lines for duty cuts, for countries with which it has FTA such as Singapore, Malaysia, Japan and Korea, while for countries like China, Australia and New Zealand, among others, it is likely to offer 40-50 tariff lines for duty cuts.

India has taken this stance to appease the domestic industry that has put up stiff resistance in negotiating the China-led RCEP, a senior official told Business Standard on condition of anonymity.

But, apparently, while China has no qualms about this offer, such a move by India has miffed Australia, which wants an ambitious trade pact and duty cuts on over 90 per cent tariff lines.

Following the meeting in Malaysia, which was mainly to ascertain the position of member countries regarding their offers for trade in goods, services and investment, trade ministers would now be sitting for an official round of negotiations in Myanmar in August and then in October in South Korea.

Commerce and Industry Minister Nirmala Sitharaman, who attended the meeting in Malaysia, reiterated the importance attached by India to RCEP negotiations and conveyed India’s “continued commitment to work with other countries to conclude a mutually acceptable RCEP agreement,” notified a statement by the ministry of commerce and industry.  

Malaysia is the Association of Southeast Asian Nations (ASEAN) chair for this year. The deadline for concluding RCEP is by the year-end.

Launched in November 2012, RCEP is seen as a counteraction against US-led Trans-Pacific Partnership (TPP) agreement. It is being negotiated between the 10-member ASEAN economies —Singapore, Malaysia, Thailand, Vietnam, Indonesia, Philippines, Myanmar, Laos, Cambodia and Brunei and six of its free trade partners — China, Australia, Japan, South Korea, New Zealand and India.

So far, there have been eight rounds of talks and it is learnt that the offer on trade in services has already been negotiated. India is also seeking separate agreements on trade in goods and trade in services and investment within the RCEP.

STOCK IN TRADE

• Launched in November 2012, RCEP is seen as a counter to the US-led Trans-Pacific Partnership (TPP) agreement
   
• It is being negotiated between the 10-member ASEAN economies — Singapore, Malaysia, Thailand, Vietnam, Indonesia, Philippines, Myanmar, Laos, Cambodia and Brunei and six of its free trade partners — China, Australia, Japan, South Korea, New Zealand and India
   
• So far, there have been eight rounds of talks and it is learnt that the offer on trade in services has already been negotiated
   
• India is also seeking separate agreements on trade in goods and trade in services and investment within the RCEP