• Several Asian member countries of the proposed Regional Comprehensive Economic Partnership (RCEP) have offered India a significant concession on the extent to which it needs to open up its markets, in a bid to encourage it to join the partnership quickly.
  • The RCEP is a proposed trade agreement between the 10 Association of Southeast Asian Nations (ASEAN) countries and their six free trade agreement partners, namely Australia, China, India, Japan, Korea, and New Zealand.
  • The grouping would comprise 25% of global GDP, 30% of global trade, 26% of FDI flows, and 45% of the population.
  • The ASEAN countries are keen to have India as part of the partnership and have made India a concessional offer of opening up only about 83% of its market, as compared to the original 92% that the RCEP agreement stipulated.
  • And regarding India’s concerns about further opening its market to China and skewing the trade deficit between them further, the RCEP allows for bilateral agreements also to be made so India can perhaps open up to China gradually and not in one go.
  • Opening up its market to China has been India’s main concern about joining RCEP.
  • India has achieved some success regarding some of its other concerns, such as getting the other RCEP countries to liberalise their services markets and allow for a more free movement of service sector professionals.
  • India stands to gain a lot from joining RCEP.
  • At a time when so much trade is being diverted from China because of the ongoing trade tensions with the U.S., India can corner a lot of this if it joins RCEP.
  • India and a few other countries want only a statement on “substantial progress” to be made during the summit, and for negotiations to be pushed into the second half of next year.

Apart from India, Indonesia and Australia are also due to go to elections in 2019, and while this adds to the urgency of concluding the RCEP negotiations, it makes it harder for governments to give any concessions on tariffs and subsidies closer to polls, given political compulsions.