China wants 85 per cent of its products to enter India duty-free.In turn China is willing to give duty-free access to 92 per cent of Indian exports.
India has offered to open up 74 per cent of its market to Chinese goods in phases, but China is not satisfied with the proposal.
India offers lower concessions to China compared to other countries where over 90 per cent of imports can come duty-free. However, even the current arrangement faces the risk of domination by Chinese goods in the Indian markets, which would further impact the trade deficit estimated at 63 billion dollars in the last financial year.
In fact India has little option than opening up the market gradually with a long tariff phase-out period so that Indian players have time to adjust to the competition.
India, China, Japan, South Korea, Australia, New Zealand and the ten Asean nations are part of the world’s largest free-trade agreement under the Regional Comprehensive Economic Partnership (RCEP). Despite India’s concerns about its trade deficits with Asean countries and China, it would be missing out on a key economic opportunity to establish a presence in the fast-growing Asean region if it did not join the RCEP.