The latest twist in India's policy on foreign trade may, however, benefit the US.
Further
curbs on Chinese imports and a trade deal with the United States may
follow India's move to pull out of the Regional
Comprehensive Economic Partnership (RCEP).
China
figured prominently in New Delhi's move on Monday to pull out of the
pact after 7 years of back and forth negotiations. India said on
Monday that a lack of assurance on safeguards to protect the domestic
industry from dumping by China and no credible promise by Beijing to
allow market access to Indian goods were reasons it was quitting the
pact.
As
a result, the government will double down on its efforts to curb
imports from China, which were more than $70 billion in 2018-19,
senior officials in the know said. "Presence of significant
amounts of major non-tariff barriers that are publicly known and
China's unwillingness to remove them were major hindrances towards a
treaty," a trade expert said.
India
had also feared that rules of origin would continue to be flouted by
Chinese producers, who ship high-value goods such as mobile phones
and electronics through Vietnam and other Asean nations, to dodge
relatively higher tariffs.
Possible
US deal
The
latest twist in India's policy on foreign trade may, however, benefit
the US. "US President Donald Trump has over the past two years
continued to put pressure on India for a broad based free-trade
agreement (FTA) talks. These may start sooner rather than in the
distant future," a senior trade expert said.
Case
in point: During Prime Minister Narendra Modi's last visit to the US,
Trump had promised a trade
deal with India “very soon”, and a larger deal down the line.
This was followed up by Commerce and Industry Minister Piyush Goyal
last month batting for 'closer trade engagement' with the US. "India
and the US have resolved most of their broad trade differences and
the countries must look at a much larger deal like a bilateral
agreement," Goyal had said in no uncertain terms.
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