India has decided not to join the Regional Comprehensive Economic Partnership (RCEP) agreement during the 3-day ASEAN summit in Bangkok, sources said, citing that Prime Minister Narendra Modi stands firm as New Delhi’s key concerns were not addressed.
“There will be no compromise on core interests. The RCEP agreement does not reflect its original intent, the outcome not fair or balanced,” sources told news agency ANI.
In his speech at RCEP summit, Modi said: “India stands for greater regional integration as well as for freer trade and adherence to rule-based international order. India has been pro-actively, constructively and meaningfully engaged in the RCEP negotiations since inception.”
Modi added: 'Today, when we look around we see during seven years of RCEP negotiations, many things, including global economic and trade scenarios, have changed. We can't overlook these changes. The present RCEP Agreement doesn’t fully reflect basic spirit of RCEP.”
“India’s stand is a mixture of pragmatism, the urge to safeguard interests of poor and effort to give an advantage to India’s service sector. While not shying away from opening up to global competition across sectors,” the sources said.
“Gone are the days when Indian negotiators caved in to pressures from global powers on trade issues. This time, India played on front foot, stressing on need to address India’s concerns over trade deficits and need for countries to open markets to Indian services and investments,” the sources added.
India also raised the unviability of Most Favoured Nation (MFN) obligations where India would be forced to give similar benefits to Regional Comprehensive, the sources said.
Leaders of India and 15 Asia-Pacific countries were expected to announce later on Monday successful conclusion of seven-year negotiations to create the world's largest free trade region.
The possible delay in firming up the Regional Comprehensive Economic Partnership (RCEP) during the 3-day ASEAN summit in Bangkok was attributed to India's "new demands" on market access, and tariff related issues.
Sources said China was forcefully pushing for inking the deal during the RCEP summit later in the day, which was seen as an attempt to counter-balance the impact of its lingering trade war with the US as well as to project the region's economic might to the West.
The proposed free-trade agreement includes 10 member countries of the Association of Southeast Asian Nations (Asean) and six of the bloc's dialogue partners -- China, Japan, South Korea, India, Australia and New Zealand.
When finalised, the RCEP would become the world's largest free trade area, comprising half of the world population and will account for nearly 40 per cent of the global commerce and 35 per cent of the GDP.
Hardball negotiations to address sticky issues went down to the wire on Sunday with India holding on to its demand for amicable resolution of market access and tariff related issues.
On Saturday, the trade ministers from 16 RCEP countries failed to resolve the outstanding issues identified by India though back-channel talks continued on the sidelines of the ASEAN summit to resolve the sticky issues.
India has been forcefully raising the issue of market access as well as protected lists of goods mainly to shield its domestic market as there have been fears that the country may be flooded with cheap Chinese agricultural and industrial products once it signs the deal.
The sources said except India, all 15 RCEP member countries were on board in finalising the deal at Monday's summit.
(With PTI inputs)