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India plans to cut taxes on 80% of Chinese products
After seven years of marathon negotiations, the ASEAN Ten Countries and the six Asia-Pacific countries including China, India, Japan, South Korea, Australia and New Zealand have reached a substantive free trade agreement, the Regional Comprehensive Economic Partnership Agreement (RCEP). Progress, India, the most difficult to persuade of the 16 members of the "nail house" has finally loosened.
According to Indian media reports, on September 30, in the last round of consultations held in Vietnam, India, which had been slow to make concessions, intends to reduce tariffs on the members of the agreement, 80% of which can receive preferential treatment.
According to the plan, India will immediately cancel the tariff on 28% of Chinese products, and the remaining tariffs on products imported from China will be cancelled in batches within 5, 10 and 15 years.
Shen Minghui, secretary-general of the Asia-Pacific Economic Cooperation and East Asia Cooperation of the Chinese Academy of Social Sciences, said that India’s attitude has softened. On the one hand, India is unwilling to miss the historic opportunity and platform of RCEP, and on the other hand, it is the result of joint efforts and mutual concessions. From the perspective of the region, it is conducive to opening up regional production networks and facilitating regional trade. From the perspective of the region, it also has a strong symbolic significance for countering trade protectionism and maintaining regional economic integration.
RCEP is the last bus that India can't miss.
RCEP is a free trade agreement between the 10 ASEAN countries and six Asia-Pacific countries including China, India, Japan, South Korea, Australia and New Zealand. Since the opening of the consultations in November 2012, until last year, countries have promised to strive to conclude negotiations by the end of this year. The reason why the negotiations have not progressed, the hesitant India is the main entanglement point that caused the agreement to be deadlocked.
The reason behind this is that in recent years, India has been advancing the “Made in India” strategy and attaching importance to the protection of domestic industries and companies. India's development of an export-oriented economy has grown considerably over the past few years, and the government is also keen to attract investment and stimulate manufacturing. However, under the Indian economic structure, this contradicts the “hard level” such as tariff reductions required under the RCEP framework.
Under the new round of global trade system reconstruction, if India does not seize the last chance of RCEP, it is likely to be rebuilt by this round of trade system, which is also the main consideration for India to make concessions.
According to Indian media reports, RCEP will reach 39% of global gross domestic product (GDP), 26% of global foreign direct investment (FDI) and 45% of global population, and is expected to become the world's largest free trade zone. India can enter the most important Asia-Pacific market through RCEP, especially the Chinese market that has not signed a free trade agreement.
In addition, the US government canceled the GSP treatment given to India in June this year, and Indian Prime Minister Modi personally went to the United States to find a way out without any factual results. In this context, the Asian market is even more important.