India is ready to open the doors wider for Asean countries under the Regional Comprehensive Economic Partnership (RCEP) pact being negotiated with 16 countries. New Delhi hopes to do one better than even Japan, China, New Zealand and Australia
In the RCEP negotiations in Bangkok last week, India, backed by China and South Korea, said it would cut tariffs on 70 per cent of all traded items with the 10 Asean (Association of South East Asian Nations) members; for the others it would make cuts on just 40 per cent of the tariff lines, a Commerce Ministry official told BusinessLine .
“Since India has free-trade agreements (FTAs) with not only Asean but also a number of members of the bloc independently, it will not be too difficult to commit to wider market access for the region. But with other countries, caution has to be maintained,” the official said.
RCEP seeks to create the largest regional trading bloc in the world. RCEP countries, which include Asean and its FTA partners, account for 45 per cent of the world population, with a combined gross domestic product of $21.4 trillion.
The ambitious pact — it includes goods, services, investment, economic and technical cooperation, intellectual property, competition and dispute settlement — is expected to be concluded by the end of the year.
To discuss specific numbers related to the tariff cuts and the services sectors that are to be opened up, a series of meetings have been planned for March and April.
“Depending on the progress that happens at these meetings, a decision will be taken on whether a ministerial meeting of trade ministers from RCEP countries is to be held April-end,” the official said.
India needs to be cautious with China as goods from that country are anyway flooding the domestic market. It also has to be careful about what it offers Australia and New Zealand, the two countries with which it does not have an FTA.
India has FTAs with both Japan and South Korea.
Asean, comprising Malaysia, Indonesia, the Philippines, Vietnam, Thailand, Brunei, Singapore, Cambodia, Laos and Myanmar, has been trying to convince members to go for wide-scale opening up, of not less than 80 per cent of items.
It is looking at a three-tiered structure where member-countries offer different market openings to Asean, their individual FTA partners and non-FTA partners. Australia and Japan, too, are pushing for wide-ranging tariff cuts.