Discussions for the proposed Free Trade Platform comprising the major Asian countries – the RCEP (Regional Comprehensive Economic Partnership), is entering into a tough round with India resisting zero tax regime advocated by major partners. Commerce Ministry officials have indicated that eliminating import duty on majority of tradable goods will be disastrous for India.
Existing data indicate that India’s FTAs with ASEAN and bilateral ones with several other countries have bought only trade deficits. Most of the arrangements caused flooding of goods into the Indian market.
East Asia’s’ developed industrial sector and early established advantage in FTA formations creates India as a perpetual market with little potential for creation of value addition.
In the case of RCEP, the major concern is China. Giving duty free access to Chinese goods will be disastrous for domestic industries. China, Japan and South Korea are firm on eliminating tariff within the RCEP. ASEAN is also demanding complete free trade so that their excess capacities can be utilized. According to Commerce Ministry officials, India is proposing alternatives to zero duties in the next inter -sessional meeting at Jakarta. The Business Line quoted a commerce Ministry officials planning to raise objections to the zero tax move in the meeting.
If India is resisting zero tax framework, free trade discussions for RCEP at Jakarta may come to a halt as it is against the stand of other major countries.