Close on the heels of the meeting of trade ministers from the 16 countries negotiating the regional comprehensive economic partnership, officials are meeting this week in Vietnam where pressure will be high on India to spell out the tariff cuts in goods it proposes to offer.

“While India has recently changed tracks emphasising that it doesn’t want to bring down tariffs to zero, members would want it to reveal the tariff cuts it has in mind and try to push the country to pare them as low as possible,” a government official told BusinessLine .

Sixteen countries including India, China, Japan, South Korea, New Zealand, Australia and the 10-member ASEAN are negotiating the regional comprehensive economic partnership (RCEP) covering goods, services, investment, government procurement and issues related to intellectual property rights. The scheduling of the fifteenth negotiating round in Vietnam, where crucial meetings on market access in goods, services and investments will kick-off from Friday, just a week after the trade ministers meeting in Laos, indicates that most RCEP members are serious about wrapping up the negotiations soon.

“India has to take some quick decisions as it is under immense pressure to offer increased market access in most of the items traded by the member countries and come up with the final numbers soon,” the official said.

Given the growing consensus within the RCEP countries that the same market opening be offered to all members be it China or the ASEAN, India circulated a proposal last month revealing its intention to move away from the zero-tariff offers initially being negotiated.

Protecting industry

“We are kind of desperate. If we are to offer China tariff reduction on the same items that we offer to the ASEAN, reducing duties to zero will ruin our industry. To save our industry we have to keep it at a higher level,” the official said.

India had initially offered to eliminate tariffs on 42.5 per cent of goods for China, Australia and New Zealand, 65 per cent of goods for South Korea and Japan and 80 per cent goods for ASEAN.

Officials said that tariff cuts that India would offer will be strongly linked to the offers that it receives in the area of services, especially in the area of movement of professionals.

“So far the offers in services have been inconsequential. In Vietnam, we hope there would be some improvement,” the official added.

It is important for India to be a part of the RCEP to counter other mega trade blocs being created such as the US-led Trans Pacific Partnership.

If the RCEP negotiations are successfully concluded it would result in one of the largest trading blocs in the world with a GDP of $21 trillion.

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