Trade Ministers meeting in Cambodia next week to take forward decisions taken in Bali
Facing pressure to finalise its market opening commitments under the Regional Comprehensive Economic Partnership (RCEP) pact being negotiated between 16 countries, India will hold intense bilateral discussions with China on the sidelines of the ongoing round in Bali to narrow differences on import duty cuts and the implementation period that both seek under the trade pact.
“There is a lot of pressure on India to come to an agreement with China on its offer in goods as the round will immediately be followed by a trade ministers meet in Cambodia where RCEP members are keen to come to a resolution on market access. The Indonesian Minister, who is chairing the round, has already said that negotiations will be stretched through the night in Bali if needed,” a goverment official told BusinessLine
RCEP, being negotiated between India, China, the 10-member ASEAN, Japan, South Korea, Australia and New Zealand, can potentially result in the largest free trade bloc in the world covering about 3.5 billion people and 30 per cent of the world’s Gross Domestic Product. Apart from goods, the areas being negotiated include services, investments, intellectual property and government procurement.
India has been holding discussions with China since January to come to an understanding on the level of import duty cuts it can promise but differences remain. New Delhi has tried to argue that it will not be possible for it to offer tariff elimination on more that 72 per cent of the traded items as apart from agriculture there were a lot of sensitive industrial goods that needed some protection.
New Delhi’s stance
“China is proving to be a very tough country to negotiate with as it is unwilling to settle for a figure which is substantially lower than what India is ready to offer to the ASEAN countries. This is not possible as India already has a free trade pact with the ASEAN under which it would anyway be eliminating duties on more than 80 per cent items. More over, the Indian industry faces stiffer competition from the Chinese,” the official explained.
One option that is being discussed is that of a much longer implementation period for elimination of tariffs for China, but that may not be enough to give confidence to the Indian industry. “Longer implementation periods are fine but time flies, as we are already experiencing in terms of our free trade pacts with South Korea, Japan and the ASEAN. In just about a couple of years, we will have to eliminate duties of all items that we promised,” the official added.
India will also have bilaterals with other members of the grouping such as Australia and Japan.