China-Backed Trade Bloc Seeks India’s Return to Complete Deal
A China-backed regional trade bloc has offered concessions to India in a bid to bring it back to the grouping after the South Asian nation exited talks last year, people with the knowledge of the matter said.
The bloc, now comprising 15 nations -- Asean countries, Japan, Australia, New Zealand, South Korea and China -- has written a letter seeking India’s return and expressed willingness to discuss the demand for measures that prevent dumping and safeguard mechanisms to check influx of cheap Chinese goods, the people said asking not to be identified citing rules. These are crucial to protect interest of local small businesses, they added.
The group is keen to get India back into the fold as it offers a ready market of 1.3 billion people and could be key to its success in a post-pandemic world as economies collapse and protectionism creeps across Europe and the U.S. India had opted out of the Regional Comprehensive Economic Partnership, or RCEP, after seven years of negotiations, on the grounds that its “core interest remained unresolved.”
“In post-virus scenario, nations such as Japan and Australia understand that internal economy is not going to be the engine of their recovery and a trade deal like this will help,” Amitendu Palit, a senior research fellow at the National University of Singapore, said by phone. “India is one of the better bets at this stage and if it joins it will be good for the other nations.”
While Singapore trade and industry minister Chan Chun Sing said earlier this week the deal is on track, member nations such as Japan are keen on re-engaging India to balance Beijing’s growing power.
An email sent to trade ministry spokesman remained unanswered.
Palit said the time-line may get pushed given the existing virus situation and if a second wave of the pandemic hits the countries.
Last November, just before the signing of the deal, India made last-minute demands to address its concerns, a move that irked other member nations. New Delhi was of the view that it was getting a raw deal, with its major concerns regarding high deficits with China and better market access for its services not being addressed by the group.
According to the World Trade Organization, global trade is set to fall between 13%-32% in 2020, due to the disruption of normal economic activity. India’s economy is heading for its first full-year contraction in more than four decades, as the world’s biggest lockdown cripples business activity and consumption.
Commerce minister Piyush Goyal had said early this year that India was open for RCEP talks if the barriers were addressed. The joint leaders’ statement last year had acknowledged India’s “significant outstanding issues” and had said member nations would work to resolve them “in a mutually satisfactory way”.
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