Trade pact with ASEAN to give India a competitive edge: Export body

Deepak Kumar | The Dollar Business

As India and 10 ASEAN members are gearing up for another round of negotiation on the Regional Comprehensive Economic Partnership (RCEP), an export body has expressed hope that the move will give domestic products a greater market access. In the meeting scheduled to be held in Busan, South Korea next month, the members of the proposed trade bloc are expected to come up with their detailed offers and list of items for duty-free trade. “We welcome the government’s move. The initiative, once implemented, will help India’s export sector considerably. Export will become cheaper, and it will give Indian products a better market access as well as a competitive platform in China and other partner countries,” the Federation of Indian Export Organisations (FIEO’s) Director General & CEO Ajay Sahai told The Dollar Business. The RCEP pact is currently under negotiations between 16 countries, which include India, China, Japan, South Korea, New Zealand, Australia and the 10-members of ASEAN (Association of Southeast Asian Nations). India’s current trade deficit with China is approximately $49 billion.  “The RCEP pact will give Indian exporters an opportunity to bridge the gap.  Although there is a possibility that this move could further widen the gap, it will prove beneficial for the Indian industry in the long run,” said Sahai. As part of the proposed forum, India and China are already negotiating on removing import duty on various products traded between the two neighbours. And experts say that the upcoming meeting will be crucial as the partners are aiming to seal the deal by the end of this year. India has also offered Australia and New Zealand to remove import duty on 42.5% of the shipped items. In turn, the two Asia-Pacific nations have offered to eliminate duty fee on 62.5% and 80% of items shipped from India, respectively. Analysts say that the implementation of this pact will mark the beginning of the world’s largest free trade bloc, accounting for a GDP of over $21 trillion and about 50% of the world’s trade. The negotiation for the RCEP began in November 2012 in Phnom Penn, Cambodia with an aim to bring a comprehensive and mutually beneficial economic partnership agreement between ASEAN and its partners. For ASEAN, India has already agreed to eliminate import duty on 80% items. New Delhi has offered to take off import duty on 65% of items shipped for Japan and South Korea. In exchange, the two countries have proposed to reduce duty on 80% of goods from India.  

September 15, 2015 | 5:51pm IST.