India hints it may return to RCEP if concerns addressed

Prime Minister Narendra Modi speaks with China's Premier Li Keqiang next to Indonesia's President Joko Widodo. (Reuters photo)

India may consider returning to the Regional Comprehensive Economic Partnership (RCEP) if it gets a “firm indication” that its “core interests” would be accommodated in the proposed agreement, the government said on Thursday.

Three days after Prime Minister Narendra Modi announced at a conclave in Bangkok that India would not join the RCEP, New Delhi hinted that it could review its decision if the other 15 nations addressed the “outstanding issues” it had cited to stay out of the mega trade agreement.

“If we get a firm indication that our core interests would be accommodated, at that stage, we can think of taking any further decision on this matter (on returning to the RCEP),” Raveesh Kumar, spokesperson of the Ministry of External Affairs (MEA), said while responding to a query from a journalist on the possibility of New Delhi returning to the RCEP.

Modi joined the leaders of the other RCEP negotiating countries at a summit in Bangkok on Monday and conveyed to them New Delhi's decision to stay out of what would have created the largest free trade area in the world.

New Delhi decided to stay out of the RCEP, primarily because it anticipated a surge in imports from China to India after its implementation and it was concerned over lack of protection against it.

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 other 15 RCEP negotiating countries had not been able to reach a consensus on New Delhi's proposal, it announced its decision to stay out of the agreement.

India was also concerned over lack of protection provided in the draft RCEP agreement against circumvention of the Rules of Origin.

It apprehended that India’s market could be flooded with the cheap import from a non-RCEP country that might route its goods through a RCEP-country.

New Delhi was also not ready to accept 2014 as the “base year” for bringing down tariff after the RCEP comes into place.

“Our concerns and requests on this matter are available with the other 15 members of the RCEP,” the MEA spokesperson said, indicating that it was up to the other nations participating in the negotiations to address the issues it had raised.

“We have negotiated with a clear-eyed views of our interests. We negotiated hard,” said Kumar.

Soon after the prime minister announced on Monday New Delhi's decision not to sign the RCEP agreement, Australian Prime Minister Scott Morrison said that the door would always remain open for India.

China too on Tuesday said that it would follow the principle of “mutual understanding and accommodation” to resolve the “outstanding issues” cited by India as reasons for its not joining what would have created the largest free trade area of the world.

Damien O’Connor, Minister of State for Trade of New Zealand, said that during a visit to New Delhi on Wednesday that all the other 15 RCEP negotiating nations would continue talks with India to address its concerns.

Piyush Goyal, Commerce and Industry Minister, said on Wednesday that India was open for “discussion and negotiation” if the other RCEP negotiating nations made a sincere effort to address its concerns.

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— launched the RCEP negotiations in November 2012.

If India re-joins the RCEP pact, the agreement will 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.

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