India may rethink RCEP engagement

In the background of India’s staggering merchandise trade deficit with the RCEP grouping (US$ 105 billion in FY19), India may pull out of the mega trade deal if its demands are not met, according to sources. What is hindering these talks is the whopping trade deficit (especially with China – US$ 53.6 billion) and the fact that its demands of greater market access in China have not been heeded so far. These concerns have been flaged by Commerce Secretary Mr Anup Wadhawan in his meeting with Wang Shouwen, vice-minister in China’s ministry of commerce. Major industries in India like steel, pharma, textiles and electronics, are scared that Chinese goods will inundate Indian markets. Moreover, former deals like the ones with ASEAN did not bring major gains to India. The government is also worried at the prospect of potential loss in customs revenue.