NEW DELHI: In a move to contain its rising trade deficit with China, India is mulling ways to reduce further onslaught of Chinese goods entering its market by reducing and delaying duty concessions to China.
Even though nothing is firmed up, India may maintain a separate negative lists of items on which it will give limited or no tariff concessions to Chinese imports under the Regional Comprehensive Economic Partnership (RCEP)trade agreement. Commerce minister Nirmala Sitharaman could discuss the new approach at the ministerial level talks on November 3-4 in the Philippines.
“The big elephant in the room is China which worries Japan also…For India everyone knows china is the concern,” said a commerce department official.
The new approach of differential treatment comes in the wake of India’s burgeoning trade deficit with China. In 2015-16, India’s exports to China were $9 billion while the imports were a staggering $61.7 billion leaving a trade deficit of $52.7 billion.
“With China, we may have a different negative list. We have not taken a call on this but we are discussing it,” the official said.
Since India had to do away with a three tier structure of differential duty cuts as part of the negotiations, these deviations are considered to be the last ray of hope to contain the trade deficit with China under a formal trade agreement.
RCEP is a comprehensive free trade agreement subsuming goods, services, investment, competition, economic and technical cooperation, dispute settlement and intellectual property rights between 16 countries – 10 members of the Association of Southeast Asian Nations and their six free trade agreement partners – Australia, China, India, Japan, Korea and New Zealand.