The Regional Comprehensive Economic Partnership (RCEP), a trading bloc comprising 16 Asia-Pacific countries, has issued an ultimatum to India, saying that New Delhi should cut tariffs on most products as soon as possible or leave the talks on the proposed Free Trade Agreement (FTA).
In a statement, RCEP recently said that India annoyed five of its member countries – China, Japan, Australia, South Korea and New Zealand – with its “obstructionist, defensive and half-hearted approach” to the FTA talks. They also blamed India for unnecessary “delaying” the conclusion of the talks.
The RCEP issued the statement ahead of the bloc’s 12th round of talks (April 23-29) taking place in the western Australian city of Perth. RCEP, which voiced apprehensions at the last round of negotiations in February in Brunei, made clear that the ongoing Perth round of talks could be a “turning point” in the FTA negotiations with India.
Earlier this week, a senior South Korean official said that India’s protectionist stance was disturbing, as the Narendra Modi government in New Delhi started concentrating “only on the export of manpower”. He advised the Modi administration to liberalise trade in goods and other services, and to boost investment.
The South Korean official made the request, as India is not ready to create trouble for its domestic producers by signing the FTA with RCEP. According to sources close to the Indian government, the External Affairs Ministry and the Commerce Ministry have already sought a clear direction from Prime Minister Modi on whether New Delhi should be part of the RCEP. Now, it is up to the premier to take a strategic call. Although the Indian PM is concerned over the lack of progress in New Delhi’s FTA negotiations with the RCEP, the European Union (EU), Australia and Canada, he is in no position to ignore the interest of domestic producers.
The RCEP member countries are well aware of the fact that PM Modi will finalise the FTA with Asia-Pacific trading bloc only if he gets assurance from them that the Indian producers will be ‘safe’ in future. The South Korean official has encouraged the PM to sign the deal soon, saying: “We have maintained that we have made very substantial offers and we are seriously negotiating. We cannot be brushed aside as if we were non-serious about it.”
Currently, India also hold FTA talks with the Trans Pacific Partnership (TPP), led by the US), and the Trans-Atlantic Trade and Investment Partnership (TTIP) between the US and the EU.