India set to stress on RCEP in Singapore on Thursday after PMO nod

FILE PHOTO: Prime Minister Narendra Modi speaks during the BRICS Summit in Johannesburg, South Africa | Photo: Reuters
India is set to stress its commitment to the proposed Regional Comprehensive Economic Partnership (RCEP) pact at a crucial trade ministers meet beginning Thursday in Singapore, though a final call on the issue will be taken by the Prime Minister's Office.

Commerce Minister Suresh Prabhu, who skipped the last such meeting, will attend the August 30-31 event. “While he is set to assuage the concerns of other nations on India's commitment to the pact, we will stick to our position on differential tariff cuts that single out China,” a senior commerce department official said. 

The future of the mega trade bloc, under planning since 2012, has been thrown into confusion since July when a large number of ministries in India opposed the talks in the face of growing opposition to the deal from domestic industry. Disagreement among ministries had led to the government reportedly setting up a four-member group of ministers headed by Prabhu to advise the Prime Minister on whether to continue with or withdraw from the 16-member RCEP negotiations.

No date has been set for the next meeting of ministers but the government hopes to clear the confusion on RCEP by November, when Prime Minister Narendra Modi is expected to visit Singapore for the Asean summit, a senior official said. Despite other ministries and stakeholders voicing concern on the RCEP, the commerce ministry will continue to bat for it, citing the advanced stage of negotiations and the expected benefits for India's services exports, sources said. 

Last week, the commerce secretary briefed his counterparts across ministries, including finance, steel, textile and defence at the Cabinet Secretariat on the current state of negotiations and the way forward, sources said.

The RCEP is a proposed pact between 10 Asean economies and six others with which the grouping currently has free-trade agreements (FTAs) — New Zealand, Australia, China, India, Japan and South Korea. So far, 23 rounds of talks have concluded, apart from five minister-level meets.

There has been significant pushback against the proposed deal from the domestic manufacturing and export sectors. 

They argue existing FTAs with Malaysia, Japan and South Korea are grossly unfavourable to India.  Civil society groups have also voiced concerns over possibly drastic reductions in agricultural tariffs, making Indian products uncompetitive, as well as looser investment norms, exposing the country to litigation from foreign commercial interests. 

The Asean bloc, which wants the deal done as soon as possible, have increasingly become concerned and a diplomat from the region said that the Singapore meet may become a definitive turning point.

RCEP is expected to be the world's largest regional trading bloc, with nearly 45 per cent of global population and combined gross domestic product of $21.3 trillion.

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