Is India ready for RCEP embrace?
To join RCEP, a proposed free trade agreement, India will have to take on commitments for tariff elimination.
Indian officials have concluded negotiations "in good faith" on over 21 of the 25 chapters, and the rest would be concluded before November 4, when Prime Minister Narendra Modi will join the leaders of the 10-member Association of Southeast Asian Nations (ASEAN) bloc and five other countries for the summit.
Indian officials are "narrowing the gaps" during their negotiations, including putting in adequate protection against cheap Chinese imports which are feared to flood the Indian market, once RCEP is concluded.
Differences over some areas, such as rules of origin, e-commerce, auto trigger mechanism and trade remedies, are being smoothed over by officials ahead of the summit.
As negotiations, which began six years ago, are about to conclude, voices of protest have been rising sharply across the country over the deal, including from farmers, traders and the opposition parties -- even by the Congress which during its party-led UPA government had joined the RCEP negotiations.
Farmers and affiliated organisations have appealed to the government not to sign the deal. They want agricultural produce and the dairy sector to be kept out of the purview of the RCEP. The All India Kisan Sabha has announced a nationwide protest on November 4.
Farmers' unions and non-governmental organisations working in the agricultural and allied fields have formed an Indian Coordination Committee of Farmers' Movements (ICCFM) to coordinate the protests against the proposed mega deal.
RSS affiliate Swadeshi Jagran Manch (SJM) too observed protests earlier this month against RCEP.
Indian negotiators are trying to include adequate protection against cheap Chinese imports in order to make the deal more acceptable for the Indian industry and agriculture.
However, to join RCEP, India will have to take on commitments for tariff elimination for about 90 per cent of items from the ASEAN, Japan and South Korea, and over 74 per cent from China, Australia and New Zealand.
Whether to join RCEP is a "hard decision" that the political leadership will have to take, but if India decides against joining the deal, then the market for India will finish, said a source.
"We seem to be reaching a climax in negotiations, but I think it is erroneous to presume that it would all end up in a positive conclusion. We should keep a little margin for another outcome, we should be a little wary of the outcome," former diplomat Rajiv Bhatia said.
"The RCEP draft will rise or fall on the merits of the commercial and economic considerations. If the Indian leadership comes to the conclusion that in overall terms, it is beneficial to India, they will sign. If they come to the conclusion that their partner countries are not sufficiently receptive and cooperative, they can hold back," Bhatia, a distinguished fellow at the Gateway House, told IANS.
He said there are two specific issues relating to RCEP for India. One is access to the Chinese market. "There we need to make sure our goods go in greater share to the Chinese market, and their goods come in a graduated scheme. The door cannot be opened all of a sudden to them, as they are more competitive than us.
"The second issue is of the other countries, especially the ASEAN countries -- on opening of the services products to their markets and also investments to their markets. That is why Prime Minister Narendra Modi says that we want a balanced and comprehensive outcome to the negotiations. By balanced he means that there should be reasonable give and take by all concerned, from India's perspective."
On the political and diplomatic angle, he said that India's 'Act East Policy' virtually entails that we should become part of the economic grouping in that region by joining RCEP.
"But at the end of the day, it is not so much about the diplomatic consideration, as it is the economic one that will decide the issue," Bhatia said.
He said that if India does not sign the deal on November 4, there are possibilities that negotiators will be given more time, or that the other countries say that if India does not want to sign now, let the others go ahead and sign.
"In effect there are only three outcomes -- India signs and RCEP takes off, India stays back and RCEP moves forward, and third, the negotiations are given more time for further dialogue," Bhatia said.
RCEP is a proposed free trade agreement (FTA) between the 10 member states of the ASEAN -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam -- and its six FTA partners, China, Japan, India, South Korea, Australia and New Zealand.
RCEP member states account for 3.4 billion people with a total GDP of $49.5 trillion, approximately 39 per cent of the world's GDP, with the combined GDPs of China and India making up more than half that amount.