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India seeks checks on 50% of Chinese imports in trade pact

The government has concerns over a possible surge in Chinese imports once the deal is signed as India has indicated that it can allow up to 80% of goods to enter the country at zero duty.

, TNN|
Oct 14, 2019, 10.53 AM IST
There have been sporadic protests and boycotts of Chinese products in India (File photo)
(This story originally appeared in on Oct 14, 2019)
NEW DELHI: India's insistence on providing a safety valve to cover at least 50% of Chinese imports under Regional Comprehensive Partnership (RCEP), the proposed 16-nation trading bloc, has held up conclusion of talks for the mega trade agreement that has been in the works for over six years now.

During the ministerial meeting over the weekend, commerce and industry minister Piyush Goyal also demanded that India's concerns on e-commerce, investment, taxation, micro, small & medium enterprises (MSMEs) and policies framed by local bodies should also need to be reworked before it could sign the deal, triggering complaints by negotiators from other countries, which have been pushing for early conclusion of talks, sources told TOI.

While Asean and others are ready to sign the deal, India is accused of holding it up. Just when things looked settled, Goyal and his team raised concerns resulting in a situation where the talks ended without a joint statement by the ministers.

Negotiators from other countries, especially Singapore and Thailand, blamed New Delhi for holding up the deal. A report in Japan Today alleged that Indian negotiators "almost banged the table" at the "very tough and serious" meeting in Bangkok.

What Goyal Demanded

Although the commerce department refused to comment on the issue, sources said negotiators have been given time till October 22 to try and address India's concerns, leaving just a small window of a fortnight before leaders from the 16 countries meet to take stock of the talks that were to be end by the year.

Sources said, there is a distinct possibility that only a limited deal would be possible to be thrashed out over the next month, unless adequate protection is built into the agreement.

At the heart of the friction is the government's concern over a possible surge in Chinese imports once the deal is signed as India has indicated that it can allow up to 80% of goods to enter the country at zero duty. Indian negotiators have now demanded that the automatic safeguard mechanism, which will result in higher duties in case of a sharp jump in imports, should cover more goods instead of 60-65 proposed at the moment.

Similarly, it has also demanded that there should be more protection for re-routing of goods via a third country to prevent China from shipping, say, a refrigerator via Vietnam by only attaching a handle. Although import duty on 80% of Chinese goods will be lowered to zero over a 20-year period, a bulk of goods from Asean nations will be able to enter Indian ports without payment of customs duty over the next few years.
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