India may offer China different terms in new RCEP structure.

NEW DELHI: India is working on a single tariff concession for 15 countries in the proposed Regional Comprehensive Economic Partnership (RCEP) agreement but is thinking of differential treatment for China especially to the phase out period in view of the big trade deficit between the two Asian giants.

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.

"There is a possibility that we may have the same number (common concession) but the treatment to China may be different on the number of tariff lines. What is critical is the number of years for the phaseout," said an official after the just concluded round of talks in Vietnam.

Though the final number is being worked out, the tariff cuts could be in the 65-80% range — the concessions India had offered to the 10 Asean countries and Japan and Korea, respectively in the original three-tiered structure of the RCEP. This differential treatment stems from the large trade deficit that India has with China. In 2015-16, India's exports to China were $9 billion while the imports were a staggering $61.7 billion.

Even before this round of negotiations, the commerce department wanted RCEP to go the Trans Pacific Partnership (TPP) way while discarding the three-tier structure. The TPP has offered its members countries to phase out tariffs over long periods of time stretching up to 20 years in cases of some products.

"The definition of common concession is still not clear. If the tiers are not there, then we will have to recalibrate," said the official, adding that some kind of a conclusion would have to be reached before the China round in October.

India's move comes in the wake of the RCEP talks having been stuck for a year due to lack of consensus on collapsing the three-tier structure of tariff cuts, inclusion of services and a uniform tariff concession for all members.

Source : economictimes.indiatimes.com