India, concerned at being sidelined from the US-led Trans-Pacific Partnership (TPP), is stepping up efforts to reach agreement with an alternative trade bloc centred around China, and hopes to reach a deal this year.
New Delhi has long been seen by many countries as an intransigent player at the World Trade Organization (WTO), a multilateral forum that has struggled to find the consensus it needs to move forward.
Now, after 12 advanced economies accounting for 40% of the global economy signed a TPP deal this month, India’s trade negotiators feel they need to get a move on.
Prime Minister Narendra Modi has backed an export-focused ‘Make in India’ drive as the path to prosperity for Asia’s third-largest economy, where per capita output is $1,688 a year, one fifth that in China.
With TPP out of reach - India was not invited to join - India’s negotiators are focussing instead on a Chinese-led grouping called the Regional Comprehensive Economic Partnership (RCEP) that would improve its access to Asian markets.
Trade representatives meet in Brunei from Feb. 15-19 to iron out differences on tariffs.
A senior New Delhi official, who asked not to be named, told Reuters that India was hopeful of striking a tariff-cutting deal this year, in the clearest indication yet that India wants to accelerate progress on a bloc first launched in 2012.
Ganeshan Wignaraja of the Asian Development Bank said a breakthrough on RCEP would help mitigate the competitive disadvantage of India being absent from the TPP.