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India is trying to extend protection to vulnerable sectors including agriculture, iron & steel, automobiles, and certain textile items, despite huge pressure on New Delhi from most countries participating in the Regional Comprehensive Economic Partnership (RCEP) negotiations to offer tariff concessions on almost all traded items.
“We have had discussions with all ministries and departments that have expressed concern about India’s participation in the RCEP negotiations. We have assured them that we will try to protect all vulnerable industrial sectors in addition to agriculture,” an official participating in the negotiations told BusinessLine .
Whether it will be in the form of taking no commitments or implementing tariff cuts over a longer period of time is something over which a balanced stand needs to be taken, he added.
The next round of negotiations for RCEP is scheduled in mid-February in Indonesia.
New Delhi is in bilateral talks with China, Australia and New Zealand — the three countries with which India doesn’t have a free trade pact — on the items it wants to continue to protect. “With Australia and New Zealand, the primary concern of our industry is related to dairy and farm products. With China it is a whole basket of items that need protection. We are trying our best to prioritise,” the official said.
Advise of caution
Ministries, including Iron and Steel, Heavy Industries and Textiles, have already approached the Commerce & Industry Ministry pointing out at the vulnerability of their respective sectors and advising caution in the negotiations.
It is important that some tangible results are reached between India and the three countries before the forthcoming round in Indonesia, as most RCEP members want the deal to be finalised in 2019 and patience is running out.
India, together with some members of the ASEAN such as Malaysia, managed to persuade other RCEP members to hold off sealing the deal at the end of 2018 on the ground that more time was required to decide on tariff cuts in goods, with at least some countries such as China, and also raise the levels of commitments in services.
Domestic lobbies
Meanwhile, pressure from domestic lobbies is growing against the RCEP deal. The Swadeshi Jagran Manch, the economic wing of the Rashtriya Swayamsevak Sangh, has urged the Centre not to be part of the deal as it believes that the pact could threaten India’s manufacturing growth, make survival of the small and micro enterprises sector difficult and increase trade deficit several-fold.
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