India will not sign a free trade agreement (FTA) just because there is a deadline, Union Commerce Minister Piyush Goyal said here on Wednesday. The comments come just days ahead of the Regional Comprehensive Economic Partnership (RCEP) summit meeting, which is expected to conclude the 16-nation FTA.
Prime Minister Narendra Modi will attend the RCEP summit in Bangkok on November 4, and Mr. Goyal could also travel there on November 2 for the last RCEP ministerial round before the summit. But the government has kept all countries guessing on whether India will actually join the agreement.
“In terms of the RCEP, I would like to clarify that there is a lot of wrong information all over the place. Let me assure each one of you that India will not sign FTAs in a rush. India doesn’t have a weak leadership that would enter an FTA because of a deadline,” Mr. Goyal said, striking a tough posture on the ASEAN-driven FTA, which includes India, China, Japan, South Korea, Australia and New Zealand.
However, he also added that India could not afford to be “isolated” from the world on FTAs. “We have to engage with the rest of the world which is moving towards global integration. So India will have to finely balance between our imperative to protect domestic interests yet engage with the rest of the world,” the Minister said at the States Consultation Workshop for the government’s “Make in India” programme.
The two conflicting statements from the Commerce Minister have enhanced the confusion over what India’s stand will be when Mr. Modi travels to Thailand on November 2 for a three-day visit, culminating in the RCEP summit on Monday. At the 2018 RCEP summit, Mr. Modi committed, along with other RCEP leaders, to conclude the agreement this year.
According to diplomats from at least four RCEP countries, every country but India is now on board.
“We fully expect that the leaders will make an announcement on the RCEP (FTA), declaring that most of the negotiations have been concluded, and setting a date for its adoption. The only question is whether India will also sign on to itor not,” a Delhi-based diplomat well versed with the negotiations, who asked not to be identified, told The Hindu on Wednesday.
India has been hesitant to commit to RCEP over apprehensions among local industry and trade unions and agricultural bodies that signing the FTA would lead to lowering of subsidies, and giving market access to China that will overrun local manufacturing.
The RCEP was first proposed in 2011 by the 10-member Association of South East Asian Countries (ASEAN), which has been driving 28 rounds of negotiations since then. Thailand, as the current Asean Chairperson has been particularly keen to close negotiations and has made several representations to India.
In the past few months, countries such as Singapore, Australia, Indonesia and Japan were enlisted to push India on signing the agreement, while Chinese President Xi Jinping made a personal push for it when he met the Prime Minister in Mamallapuram this month.
“We have tried to impress on the [Indian] government that it cannot hope to achieve its $5 trillion GDP target in the next few years unless it receives access to RCEP markets,” an ASEAN-country envoy said, adding that while India has been most worried about the impact of RCEP on steel, dairy and agricultural sectors, government negotiators have also taken a firm stand on including the free movement of labour for the services industry.
India was also able to negotiate a dual tariff arrangement for goods from China, and the other countries, as well as a safeguards agreement on imports.
Beyond this, however, most RCEP-nation diplomats say, no further concessions are possible if Mr. Modi decides not to sign the agreement on Monday. “We may then see all nations announcing their decision to implement the RCEP FTA in early 2020, and for India to join at a later date if it wishes to,” a diplomat said.