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India should not sign RCEP without safeguarding its domestic interest: TPCI

Updated: May 21, 2019 11:09:03am
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India should not sign RCEP without safeguarding its domestic interest: TPCI

New Delhi, May 21 (KNN) Trade Promotion Council of India (TPCI) is apprehensive that the RCEP deal may hurt India’s export competiveness as the trade balance is already skewed and there will be flood of goods imports in the Indian market, with relatively little gains on the export front.

The RCEP bloc comprises 10 Associations of South East Asian Nations (Asean) group members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners - India, China, Japan, South Korea, Australia and New Zealand.

The council's Chairman Mohit Singla said that India needs to move with optimism and caution on this mega trade agreement.

"For India, issues of tariff rate (import duty) are as important as other areas under negotiations, mainly because India does not have trade agreements into effect with all countries involved in RCEP," he said.

He added that RCEP could have a "negative impact" on sectors like steel, pharma, e-commerce, and food processing.

India is already facing challenges from Singapore, Australia and New Zealand in agriculture and dairy sector, Singla said.

He said India does not have a trade agreement with China, and the negotiations with Australia and New Zealand have not come into effect.

He asserted that on the services front, India should strongly negotiate its proposals such as greater mobility for professionals through measures like visa fee waivers.

He said according to the World Integrated Trade Solution (WITS) Simulator, India's imports may increase by USD 29 billion annually during the post-RCEP period, implying a revenue loss by as much as 1.3 per cent of GDP.

RCEP negotiations, which started in Cambodian capital Phnom Penh, aims to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights.

Pressure is mounting on India for early conclusion of the proposed trade pact.

Member countries are looking to conclude the talks by end of this year, but many issues, including the number of products over which duties will be eliminated, are yet to be finalised.

Domestic steel and other metal industries want these sectors to be kept out of the deal.

India already has a free trade pact with Asean, Japan and South Korea. It is also negotiating a similar agreement with Australia and New Zealand, but has no such plans for China.

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