India hints it is still open to consider returning to RCEP talks

India on Wednesday hinted that it might consider returning to the Regional Comprehensive Economic Partnership (RCEP) agreement, of course, if it was assured that its core interests would be accommodated in the proposed agreement.

“We have not closed our mind to it,” External Affairs Minister S Jaishankar said when he was asked about New Delhi's view on the RCEP. He was replying to questions from the audience at the Raisina Dialogue. His remark indicated New Delhi might reconsider its decision to opt-out of the mega trade deal.

“We have to look at cost and benefit, will evaluate RCEP on economic and trade merit,” Jaishankar said, almost two-and-a-half-month after Prime Minister Narendra Modi had announced at a conclave in Bangkok that India had decided not to join the pact.

Japan already indicated that it too might review its decision to join the RCEP if India stuck to its decision to stay out of it.

The 10 ASEAN (Association of South-East Asian Nations) nations – Brunei, Vietnam, Cambodia, Laos, Thailand, Indonesia, Malaysia, Myanmar, Philippines and Singapore – as well as the six free trade partners of the bloc – India, China, Japan, Australia, New Zealand and South Korea – been negotiating the proposed RCEP agreement since 2012.

If India and all the 15 other negotiating nations sign the RCEP pact, it would create a free trade area, which would have covered 3.6 billion people or the half of the global population and accounted for 39.5 % ($ 49.5 trillion) of the GDP of the world.

Modi, however, on November 4 last year had announced in Bangkok his government's decision to stay out of the RCEP.

New Delhi had decided to withdraw, primarily because it had anticipated a surge in imports from China to India after implementation of the RCEP and it had been concerned over lack of protection against such a surge. It had suggested that the RCEP agreement should provide for an “auto-trigger mechanism”, which would ensure that the safeguard duties would be automatically imposed when imports from another country would reach a certain threshold. But as the 15 other RCEP negotiating countries had not been able to reach a consensus on New Delhi's proposal, it had announced its decision to stay out of the agreement.

Prime Minister and Chinese President Xi Jinping had discussed the issue of RCEP, when they had a meeting on the sideline of the BRICS summit in Brasilia on November 14.

Modi had conveyed to Xi the reasons India had decided to stay out of the RCEP and underlined that it could only review its decision only when it would receive a firm indication from China and the 14 other nations participating in the negotiations for the proposed agreement that its concerns would be addressed. Xi had told Modi that China would follow the principle of “mutual understanding and accommodation” to resolve the “outstanding issues” cited by India as reasons for its not joining the RCEP.

India had also been concerned over lack of protection provided in the draft RCEP agreement against circumvention of the Rules of Origin. It had been anticipating that India’s market could be flooded with the cheap import from a non-RCEP country that might route its goods through an RCEP-country. Besides, India had also not been ready to accept 2014 as the “base year” for bringing down tariff after the RCEP comes into place.