Commerce & Industry Minister Nirmala Sitharaman will have her task cut out at the trade ministers’ meet of the 16-country Regional Comprehensive Economic Partnership (RCEP) in Laos later this week with members refusing to back India’s latest proposal of not reducing tariffs on goods to zero.

India’s proposal on moderate tariff reduction, as opposed to tariff elimination being negotiated so far, circulated at the recent negotiations in Jakarta, was not received well by any member, a government official told BusinessLine .

New Delhi, however, is determined to stick to its guns, especially with offers in services from other countries still not up to its expectations.

RCEP members, which include the 10-member ASEAN, India, China, Japan, South Korea, Australia and New Zealand, are seeking to create one of the largest free trade blocs in the world as the countries account for 45 per cent of the world population and over $21 trillion of gross domestic product.

“We have made it clear at the Jakarta meeting that if other members want a reasonable level of commitment from us in terms of tariff reduction in goods, they have to agree to our terms that we will not be eliminating duties in most sectors,” the official added.

The level of tariff reduction that India will offer other members will also depend on the quality of offers it receives in services.

“So far, offers have been made in over 100 services sub-sectors, but serious offers have not been made in mode 4 which relates to movement professionals and workers. Some kind of bench-marking of offers has to be done in modes, failing which we will not be in a position to be generous in goods,” the official said.

A meeting of the Trade Negotiations Committee (TNC) of RCEP is scheduled on August 3, following which trade ministers will meet on August 5. “The TNC will try to hammer out the contentious areas in goods, services and investments following which the trade ministers will decide on a feasible deadline to conclude the negotiations,” the official said.

Changing stand

India’s current position on goods is a departure from its earlier stand when it had agreed, as part of its initial offer, to eliminate tariffs on 42.5 per cent of goods from China, New Zealand and Australia, on 65 per cent of goods from Japan and South Korea and on 80 per cent of goods from the ASEAN.

The Centre decided to change its position on goods as complaints from the Indian industry on the negative impact of the older trade pacts with countries such as Japan and South Korea have been growing.

At the RCEP, too, with increasing pressure from other countries on equal market access to be offered to all (including China which is India’s greatest concern), New Delhi feels it is best to move away from a zero-tariff commitment, the official said.

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