Industry bodies are concerned about India signing RCEP as they fears China would use it to enter and dominate the Indian market with cheaper goods.
Ahead of deliberations in China on the proposed Regional Comprehensive Economic Partnership (RCEP) agreement, the Commerce Ministry convened a meeting of sector-specific players, especially from the steel industry, on July 22.
"Industry bodies are apprehensive of India signing RCEP because of fears that China will use it to enter and dominate the Indian market by flooding it with cheaper goods," an industry source who attended the meeting told Moneycontrol.
RCEP is a mega free trade agreement being negotiated among 16 countries.
It comprises 10 ASEAN group members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam), along with India, China, Japan, South Korea, Australia and New Zealand.
"The minister expressed apprehensions about signing RCEP, but also said that remaining nations out of the mega trade deal will isolate India and put it at a disadvantage, as around 45 percent of global trade is between RCEP countries currently," the industry source said.
The meet would be attended by representatives of industry bodies such as CII and FISME.
The minister expressed a view that the RCEP agreement could be used to improve its standing with partners with which it has FTAs that have put India at a disadvantage currently, the source added.
The deliberations assume significance as base metal and steel sectors have raised reservations over proposed import duty cuts under the RCEP agreement. Certain steel players have already demanded removal of the segment from the purview of existing free trade agreements with Japan and South Korea. They have claimed that the pact is not benefited them.
"All chapters were reviewed in the meeting on Monday, from upstream to downstream stakeholders," the source noted.
RCEP trade ministers are meeting in Beijing next month to take stock of the progress of negotiations.
The 27th round of the meeting between chief negotiators will take place in China later this month.
India has registered trade deficit in 2018-19 with as many as 11 RCEP member countries - including China, South Korea and Australia - out of the grouping of 16 nations that are negotiating a mega trade pact since November 2012.
The industry source said that the government is of the view that it needs to take the industry's opinions, concerns and aspirations when negotiations resume in Beijing.
RCEP negotiations, which started in Cambodian capital Phnom Penh in November 2012, aims to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights.Under a free trade agreement like RCEP, member countries significantly reduce or eliminate customs duties on maximum number of goods traded among them. They also liberalise norms to promote trade in services and boosting investments.The Great Diwali Discount!
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