India faces e-commerce hurdle in regional trade pact

17 Jun 2015


India, which is under pressure to allow e-commerce to be included in the regional comprehensive economic partnership (RCEP) agreement that it is negotiating with Japan, China, South Korea, Australia, New Zealand and the 10-member Asean, is in a peculiar situation now.

India, which had earlier pushed a services trade pact along with merchandise trade agreements with the Asean, is now seeking to ring-fence the economy against an e-commerce onslaught from across the seas.

At last week's negotiating round in Kyoto, countries, including Australia and New Zealand and members of the Asean, supported a Japanese proposal to bringing the e-commerce sector within the ambit of the negotiations

Trade ministers of the 16 countries, including India, are expected to meet in July in Kuala Lumpur to iron out issues related to the mega trade deal - Regional Comprehensive Economic Partnership agreement.

It is important for India to ensure that not too many items are subjected to sharp duty cuts as the Indian markets could be flooded with cheap Chinese products. But India has not, so far, beem able to convince other members who wanted a steep cut in duties across the board.

''Although India managed not to cave in to demands of bringing e-commerce into the ambit of the pact and lowering tariffs on most traded goods, the pressure is only going to grow at the ministerial meeting of RCEP members in Kuala Lumpur next month,'' the official said.

Commerce and industry minister Nirmala Sitharaman is likely to attend the meeting, which starts on 13 July.

The 16-member Regional Comprehensive Economic Partnership (RCEP) comprises 10 ASEAN members and their six free trade agreement (FTA) partners namely India, China, Japan, Korea, Australia and New Zealand. Together these countries account for over a quarter of the world economy.

RCEP negotiations were launched in Phnom Penh in November 2012.

The July meeting assumes significance as the pact is scheduled to be concluded this year.

Separately, India is also focusing on concluding the negotiations for the free trade agreements with Canada and Australia.

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