Government officials said it would be “premature” to suggest that India could be cut out of the Regional Comprehensive Economic Partnership (RCEP) being negotiated by 16 countries led by the ASEAN bloc, if it doesn’t agree to join it by the year-end.
The officials rejected a suggestion to that effect by Malaysian Prime Minister Mahathir Mohammed, who spoke on the sidelines of the ASEAN summit held in Bangkok on Sunday.
Reiterating that India is “consistently” engaged with RCEP negotiations, which will see a free trade agreement which includes ASEAN countries, China, Japan, South Korea, Australia and New Zealand, Commerce Ministry sources said Indian delegations have a series of meetings planned in the next few weeks to discuss the way forward in RCEP.
Unresolved issues
“India has also shown it is keen for the partnership to work, as seen by our consistent engagement on the issue. There are some issues that need to be ironed out still, but it would be extremely premature to talk about RCEP going ahead without India,” said a Commerce Ministry official, who preferred not to be named. In an interview to the CNBC channel, Mr. Mahathir said he would prefer to go ahead with a formulation of 13 countries that are willing to go ahead immediately, and allow outliers India, Australia and New Zealand to join the pact at a future date.
“They [Malaysia] can have their perspective. They are not the full RCEP. We are sure that many other countries do not share this view and want to work with India in RCEP,” the official responded.
While Mr. Mahathir’s messaging may have been bluntly put, others in the grouping have been nudging India to show progress on RCEP negotiations in time for a proposed final declaration in November this year.
Last year, the government had been able to negotiate for time on RCEP given elections were due to be held in India, Indonesia, Thailand and Australia between March and May this year.
“With the elections done, we expect the pressure to be ratcheted up by ASEAN countries to conclude the negotiations, and India will need to make a choice quite soon,” said a diplomat privy to the negotiations.
In their Bangkok declaration on Sunday, ASEAN leaders stated their “strong commitment” to concluding RCEP negotiations, adding that ASEAN partners like India must “prioritise RCEP negotiations and work with ASEAN to conclude the RCEP negotiations within this year.”
Last week, Singapore’s Minister of Communication & Information and Minister-in-Charge of Trade Relations S. Iswaran said during a visit to Delhi that India must not stay out of the agreement.
“India can ask itself, if it is better off inside such an agreement or outside such an agreement from business and also from a geopolitical point of view... if India is not part of it, I think it will be a loss.”
Apart from giving up the first mover’s advantage, India, would give up the chance to frame the grouping’s rules and investment standards if it fails to join RCEP, say diplomats.
Meanwhile the Chinese government also reached out to the government, sending a delegation led by Vice Minister for Commerce Wang Shouwen for talks with Commerce Secretary Anup Wadhawan earlier this month.
