India decides not to join mega RCEP trade deal

Highlights:

• “There will be no compromise on core interests. RCEP agreement does not reflect its original intent,” top government sources said.
• The government had taken a tough stand over the mega Asian trade pact, pointing out several concerns — ranging from the base year for tariff reduction to protection against Chinese imports and opening up services sector by the other 15 countries.

“Our farmers, traders, professionals and industries have stakes in such decisions. Equally important are the workers and consumers, who make India a huge market and the third biggest economy in terms of purchasing power parity. When I measure the RCEP agreement with respect to the interests of all Indians, I do not get a positive answer. Therefore, neither the Talisman of Gandhiji nor my own conscience permit me to join RCEP,” PM Modi said.

India’s decision to drop out of the Regional Comprehensive Economic Partnership (RCEP) was a tough call and was deliberated at the highest level in the past few months. The decision to pull away at the eleventh hour is unlikely to send a positive signal in the region. There have been concerns that India’s Indo-Pacific policy would be adversely affected.

The Modi government had taken a tough stand over the mega Asian trade pact, pointing out several concerns — ranging from the base year for tariff reduction to protection against Chinese imports and opening up services sector by the other 15 countries.

“Our farmers, traders, professionals and industries have stakes in such decisions. Equally important are workers and consumers…When I measure the RCEP agreement with respect to the interests of all Indians, I do not get a positive answer. Therefore, neither the talisman of Gandhiji nor my own conscience permit me to join RCEP,” Modi said at the RCEP Summit in Thailand.

Indian officials had made it clear that the Modi administration is unwilling to accept any deadline and wanted the country’s interests to be fully protected.

There was no credible assurance for India on market access and non-tariff barriers. India also had very valid concerns on keeping 2014 as the base year for tariff reductions, sources said.