India has reservations about the Regional Comprehensive Economic Partnership (RCEP) and is adamant about protecting its domestic industries.One is RCEP’s tariff requirements. RCEP proposes that 92 per cent of India’s traded items must have zero tariffs by the end of a 15-year period. But the main point of contention for India is the presence of China, with which it has a massive trade deficit. India is concerned that greater market access for China will harm its key manufacturing sectors like steel and textiles. India is also worried about giving greater market access to other non-FTA partners like Australia and New Zealand.

However,Asean countries are keen to have India as part of the partnership and have made India a concessional offer to open up about 83 per cent of its tariff lines instead. India is better off joining RCEP as it will face a marginal fall in real GDP growth if it does not join, while it stands to gain at least 0.06 percentage points of growth in 2020 if it does. The deal will undoubtedly be more strategically significant if it contains three of the world’s largest economies — China, Japan and India. Though India fears cheaper imports flooding its market, some key industries have much to gain from lower tariffs under RCEP.