India is now considering rejoining the Regional Comprehensive Economic Partnership (RCEP) after its ties with the US come under strain over tariffs and relations with China improve, a report by Mint said on August 21.
The government is considering a “deeper embrace of the East” with a potential return to the trading bloc, the report said.
New Delhi had decided to walk out of the trade group in 2019 before the RCEP pact was signed, citing market access, trade deficits, risks to farmers and domestic manufacturers as major risks. One of the reasons to leave the bloc was over concerns that Chinese goods would be rerouted through these East Asian countries, affecting the trade balance.
However, now the government officials are weighing the pros and cons of joining the bloc as part of efforts to diversify export markets and tensions over steep US tariffs, the newspaper said.
US President Donald Trump has imposed a 25 percent base tariff in addition to a penalty of 25 percent for buying Russian crude oil. However, reports indicate that the extra 25 percent, to be implemented after August 27, could be dropped following ‘positive’ talks between Trump and Russia’s Vladimir Putin.
Moreover, the relations with the Chinese have improved in the last few weeks with Prime Minister Narendra Modi set to visit China later this month. Beijing has reportedly also agreed to supply of rare earth magnets, fertilizers and resumption of direct flights with India.
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