NEW DELHI: India has offered least tariff concessions to Chinese goods under the proposed free trade agreement between 16 Asia-Pacific countries including China and Australia.
The highest duty cuts have been offered to imports from ASEAN under the Regional Comprehensive Economic Partnership (RCEP) trade agreement.
The formula, intended to reduce the rising trade deficit with China, has not found many takers. “The deviations are being discussed. Nothing is final,” said an official aware of the development.
The proposal was discussed in the latest round of RCEP negotiations held in Japan from February 27-March 3.
This was the 17th round of talks and the next round would be held in the Philippines in April before a likely ministerial level meeting in May. The new approach of differential treatment to duty cuts comes in the wake of India’s burgeoning trade deficit with China.
In FY2015-16, India’s exports to China were mere $9 billion while the imports were $61.7 billion leaving a $52.7 billion deficit.
RCEP is a comprehensive free trade agreement subsuming goods, services, investment, competition, economic and technical cooperation, dispute settlement and intellectual property rights between 16 countries — 10 members of the Association of Southeast Asian Nations and their six free trade agreement partners — Australia, China, India, Japan, Korea and New Zealand.
The RCEP grouping comprises over 45% of the world’s population, with a combined GDP of about $21 trillion.
However, despite India being able to convince the other countries to negotiate goods, services and investments together, not much progress has been made on liberalising services trade in the RCEP. “There is progress on the goods front but not in services,” said another official.