Indian textile manufacturers and exporters feel opening up the domestic market for China under the proposed Regional Comprehensive Economic Partnership (RCEP) is not a good idea. They feel added competition from cheaper Chinese goods may put pressure on domestic sales at a time when international business has been under threat from Bangladesh and Vietnam.

Based on India’s existing free trade agreement with Asean, RCEP will include all the nations with which Asean has trade deals — New Zealand, Australia, China, India, Japan and South Korea.

Export of readymade garments, in which India’s export competitiveness has fallen over the past fiscal, contracted by 2.44 per cent in August. While the ongoing US-China trade war presents an opportunity for Indian textile manufacturers to enhance exports to the US, China too would be looking for new markets for its products. Meanwhile, India is preparing a final list of products on which it may retain import tariffs for China, painfully aware of a huge trade deficit. Such a list is based on its plan of a differential tariff reduction for various nations. Also under consideration is a mechanism to fix an import ceiling, again particularly for China. This is the first time India will fix such a ceiling in any trade deal.